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THE 

OF  THE 


UNIVERSITY  OF  ILLINOIS   STUDIES 

IN  THE 
SOCIAL  SCIENCES 


Vol.  X  September-December,  1922  Nos.  3  and  4 


BOARD  OF  EDITORS 

ERNEST  L.  BOGART  JOHN  A.  FAIRLIE 

LAURENCE  M.  LARSON 


PUBLISHED  BY  THE  UNIVERSITY  OF  ILLINOIS 

UNDER  THE  AUSPICES  OF  THE  GRADUATE  SCHOOL 

URBANA,  ILLINOIS 


COPYRIGHT,  1924 
BY  THE  UNIVERSITY  OF  ILLINOIS 


WORKMEN'S  REPRESENTATION  IN 
INDUSTRIAL  GOVERNMENT 


BY 


EARL  J.  MILLER 

Instructor  in  Economics 
University  of  Illinois 


PUBLISHED  BY  THE  UNIVERSITY  OF  ILLINOIS 
URBANA 


C  o  o.  u 

TABLE  OF  CONTENTS 

CHAPTER  PAGE 

PREFACE 7 

I.     THE  COUNCIL  MOVEMENT  IN  FOREIGN  COUNTRIES 9 

A.  The  Council  Movement  in  England 10 

B.  The  Council  Movement  in  Germany 24 

C.  Works  Council  Law  of  Austria 33 

Further  Developments  in  Europe 34 

II.    THE  NON-UNION  COUNCIL  MOVEMENT  IN  THE 

UNITED  STATES 37 

A.  Early  History  of  Non-Union  Council  Plans  in  the 
United   States 37 

B.  The  Period  of  Rapid  Expansion 43 

C.  The  Continued  Growth  of  the  Council  Movement. .  48 

D.  Description  of  Non-Union  Council  Plans  in  the 
United   States 51 

III.    THE  THEORY  OF  THE  COUNCIL  MOVEMENT 68 

A.  The  Larger  Aspects  of  the  Council  Movement 68 

B.  The  Council  Movement  as  a  Means  to  Check  the 
Growth  of  Unions 71 

C.  Democratic  Industrial  Management  as  a  Means  to 
Industrial  Efficiency 72 

IV.    RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  IN 

THE  UNITED  STATES 98 

V.     UNION  JOINT  COUNCILS  IN  THE  UNITED  STATES 140 

A.  The  Three  Types  of  Union  Joint  Councils 140 

B.  Summary  and  Conclusions 157 

VI.    TRADE  UNIONS  VERSUS  THE  NON-UNION  COUNCILS.  ...  159 

BIBLIOGRAPHY 178 

INDEX. .                                                                               .  181 


PREFACE 

This  study  is  primarily  concerned  with  certain  plans  of 
workmen's  representation  in  industrial  government  which 
have  recently  developed  in  the  United  States,  and  which 
have  been  variously  designated  as  shop  committee  plans, 
employee  representation  plans,  works  councils,  et  cetera.  It 
is  the  purpose  of  the  study  to  present  these  plans  in  their 
true  light  with  respect  to  their  origin,  form,  methods  of 
procedure,  the  theory  underlying  them,  accomplishments,  re- 
lation to  forms  of  workmen's  representation  developed  in 
other  countries,  and  relation  to  the  trade  union  movement 
in  the  United  States.  A  proper  consideration  of  the  two 
points  last  named  necessitated  the  inclusion  of  a  chapter  very 
briefly  describing  the  council  movement  in  foreign  countries, 
and  one  describing  the  joint  representative  councils  which 
have  developed  in  connection  with  unions  in  the  United 
States. 


CHAPTER  I 
THE  COUNCIL  MOVEMENT  IN  FOREIGN  COUNTRIES 

There  has  developed  recently  in  the  field  of  industrial  manage- 
ment a  widespread  and  pronounced  movement  toward  the  for- 
mation of  joint  industrial  councils,  joint  works  councils,  works 
committees,  shop  committees,  and  related  bodies.  In  the  litera- 
ture of  the  labor  movement  they  are  often  grouped  under  such 
general  terms  as  "works  councils,"  or  "joint  councils."  Though 
somewhat  diverse  in  form,  these  bodies  have  in  common  certain 
fundamental  characteristics. 

In  all  cases,  national  and  district  joint  industrial  councils  have 
been  groups  composed  of  representatives  from  employers  and 
from  trade  unions  within  an  industry  or  section  of  an  industry. 
They  have  developed  extensively  in  England,  and  to  some  extent 
in  the  United  States. 

Works  councils,  composed  of  representatives  from  both  the 
management  and  the  workers  within  a  single  industrial  works  or 
plant,  have  developed  in  England,  Germany,  Norway,  Austria, 
United  States,  and  Czecho-Slovakia.  In  many  industrial  concerns 
having  this  type  of  council  there  are  also  joint  shop  committees 
or  joint  department  committees,  similar  to  the  larger  council  in 
form  and  method  of  procedure.  The  representatives  of  the 
workers  in  these  joint  shop  or  department  committees  are 
generally  elected  by  the  men  in  the  shop  or  department.  Works 
councils,  shop  committees,  or  department  committees  are,  in 
some  cases,  composed  only  of  representatives  of  the  workers.  In 
such  cases  arrangements  are  made  for  a  part  or  all  of  such  coun- 
cils or  committees  to  meet  and  carry  on  negotiations  with  repre- 
sentatives of  the  management. 

The  primary  object  of  this  study  is  the  description  and  evalua- 
tion of  the  non-union  employee  representation  plans  developing  in 
American  industries.  The  major  portion  of  this  study  is,  there- 
fore, devoted  to  such  plans.  But  the  desire  to  present  the  larger 
aspects  of  the  council  movement  and  the  necessity  of  comparing 
the  non-union  councils  or  committees  with  those  based  upon 
unions  have  lead  to  the  inclusion  of  a  brief  discussion  of  the  coun- 
cil movement  in  Europe,  and  also  of  certain  types  of  joint  councils 
based  upon  unions  which  have  developed  in  the  United  States. 


io     WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [414 

A.  THE  COUNCIL  MOVEMENT  IN  ENGLAND 

I.  Developments  Prior  to  the  Whitley  Councils.  A  committee 
was  appointed  in  the  English  Parliament  in  1917  to  study  the 
problem  of  industrial  relations  with  a  view  to  suggesting  ways 
and  means  for  gaining  harmonious  cooperation  between  capital 
and  labor  during  the  post-war  reconstruction  period.  This  com- 
mittee, popularly  known  as  the  "Whitley  Committee,"  brought  in 
a  report1  that  resulted  in  the  establishing  of  national  joint  in- 
dustrial councils,  district  joint  councils,  and  works  committees  in 
many  important  English  industries. 

These  Whitley  Councils  have  been  widely  heralded  as  a  more 
or  less  revolutionary  change  in  the  management  of  English  in- 
dustries. This  change  has  generally  been  regarded  as  a  result  of 
the  growing  demand  for  democratic  industrial  control  among  Eng- 
lish workers,  especially  among  the  Guild  Socialists,  Communists, 
members  of  the  Social  Labor  Party,  the  miners,  and  the  railway 
workers.  These  groups  have  long  been  striving  for  radical 
changes  in  the  industrial  organization  in  the  direction  of  workers' 
control,  or  share  in  control  through  the  medium  of  workshop 
committees,  works  councils,  industrial  councils,  and  similar 
bodies. 

There  is  danger,  however,  of  picturing  as  revolutionary  a  move- 
ment that  has  been  essentially  evolutionary  in  character,  gradu- 
ally expanding  over  a  long  period  in  the  direction  of  an  increased 
share  in  control  for  the  workers.  The  truth  of  the  matter  is, 
the  Whitley  council  movement  has  been  and  is  an  attempt  to 
make  a  more  general  application  of  methods  that  had  been  thus 
gradually  evolved  as  a  part  of  the  technique  of  joint  industrial 
control  by  employees  and  unions.  Therefore,  an  adequate  descrip- 
tion of  the  development  of  works  councils  in  English  industry 
begins  with  reference  to  the  extent  and  character  of  the  councils 
existing  before  the  Whitley  movement  began. 

The  policy  of  forming  joint  councils  of  union  representatives  and 
employers  to  act  as  legislative  bodies  for  drawing  up  general  rules 
and  regulations  to  govern  industrial  relations  has  been  practiced 

'Reconstruction  Committee,  "Interim  Report  on  Joint  Standing  Councils," 
printed  in  full  in  Bulletin  of  the  United  States  Bureau  of  Labor  Statistics,  No. 
255,  Washington,  1919. 


415]  THE  COUNCIL   MOVEMENT   IN   FOREIGN   COUNTRIES  II 

very  extensively  in  England  for  many  years.  Such  councils  have 
dealt  with  wages,  hours,  working  conditions,  discharge,  discipline, 
methods  of  payment,  adoption  of  new  processes  and  machinery, 
standards  of  work,  distribution  of  work,  overtime,  holidays,  and 
many  similar  matters.  The  following  quotation  throws  light  upon 
the  general  situation: 

"The  most  obvious  form  of  permanent  machinery  for  collective 
bargaining  is  a  joint  committee,  consisting  of  equal  numbers  of 
representatives  of  the  employers  and  workmen  respectively.  This 
may  almost  be  called  the  'orthodox'  panacea  of  industrial  philan- 
thropists. For  over  thirty  years,  since  the  experiments  of  Sir  Ru- 
pert Kettle  and  Mr.  Mundella,  employers  and  workmen  have 
been  persistently  urged  to  adopt  the  form  of  a  'board  of  arbitra- 
tion and  conciliation,'  consisting  of  representatives  of  each  side, 
and  with  or  without  an  impartial  chairman  or  an  umpire.  Such  a 
joint  committee,  it  has  been  supposed,  could  thrash  out  in  friendly 
discussion  all  points  in  dispute,  and  arrive  at  an  amicable  under- 
standing. In  intractable  cases,  the  umpire's  decision  would  cut 
the  Gordian  knot.  Readers  of  the  'History  of  Trade  Unionism' 
will  remember  how  eagerly  this  idea  was  taken  up  by  the  organ- 
ized workmen  in  certain  great  industries,  and  how,  in  coal  mining 
and  iron  and  steel  in  particular,  it  has  since  enjoyed  the  favor 
both  of  employers  and  employed.  We  need  not  stop  to  describe 
all  the  cases  in  which  this  form  of  machinery  has,  from  time  to 
time,  been  adopted.  We  shall  best  understand  its  operation  by 
considering  a  couple  of  leading  instances,  the  'joint  boards'  of 
the  boot  and  shoe  trade,  and  the  'joint  committees'  of  the  North- 
umberland and  Durham  coal  miners."* 

These  joint  councils  have  been  local  in  the  majority  of  trades, 
and  local  and  district  and  national  in  many  trades.  They  are  typi- 
cally composed  of  an  equal  number  of  representatives  of  em- 
ployers and  workers,  and  in  some  cases  there  is  an  impartial 
chairman.  They  meet  regularly  and  adopt  trade  agreements. 
There  is  usually  direct  or  indirect  provision  in  the  agreements 
for  renewal  of  negotiations,  thus  making  these  joint  councils  more 
or  less  permanent  in  character. 

2Webb,  Sidney  and  Beatrice,  Industrial  Democracy,  p.  185. 


12      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [416 

There  are  many  instances  of  joint  councils  which  meet  regular- 
ly to  consider  all  matters  of  interest  to  the  trade,  and  thus  become 
of  a  more  continuous  and  constructive  character  than  those  coun- 
cils formed  merely  on  the  occasion  of  new  agreements.  These  per- 
manent bodies  oftentimes  perform  the  functions  of  a  conciliation 
board  as  well  as  a  legislative  body,  an  example  being  the  early 
conciliation  boards  in  the  building  trades.  Their  functions  are 
described  as  follows:  "Although  the  principal  objects  of  the  Con- 
ciliation Boards  are  the  settlement  of  disputes,  ...  it  shall 
also  be  within  their  province  to  meet  and  discuss  any  question  of 
trade  interest  at  the  request  of  any  of  the  parties  to  the  agree- 
ment."3 

Similar  boards  in  the  plumbing  industry  had  as  their  objects 
"to  consider  any  question  affecting  the  plumbing  trade  and  to 
procure  the  improvement  of  any  existing  laws,  usages  and  cus- 
toms, which  the  Board  may  consider  to  be  prejudicial  to  the  trade, 
and  to  amend  or  oppose  legislation  or  other  measures  or  the  es- 
tablishment of  any  usages  or  customs  which  in  the  opinion  of  the 
Board  might  prejudicially  affect  our  craft."4 

The  Birmingham  Alliances  in  the  Light  Metal  Trades,5  the 
early  National  Council  in  the  Cotton  Industry,8  the  Joint  Coun- 
cils to  which  Carpenters',  Bricklayers',  Stonemasons',  Plumbers', 
and  Plasterers'  Unions  have  been  parties,  and  the  early  Joint 
Conferences  in  the  coal  mining,  and  boot  and  shoe  industries,  are 
further  examples.7 

It  is  apparent,  then,  that  the  trade  union  movement  had  ob- 
tained for  the  workers  a  considerable  share  in  industrial  control 
through  the  medium  of  national  and  district  representative  joint 
councils  long  before  the  Whitley  movement  developed. 

The  most  important  national  industrial  joint  council  in  England 
which  existed  previous  to,  and  independent  of,  the  Whitley  Coun- 
cils, is  the  Industrial  Council  of  the  Building  Industry  which  has 
oftentimes  been  referred  to  as  the  forerunner  of  the  Whitley 
Councils.  This  industrial  council  was  first  suggested  by  the  Na- 

*Goodrich,  Carter  L.,  Frontier  of  Control,  p.  224. 

*Ibid.,  p.  224. 

"Ibid.,  p.  236. 

"Webb,  Sidney  and  Beatrice,  Industrial  Democracy,  p.  176. 

''Ibid.,  chapter  on  "Method  of  Collective  Bargaining." 


417]  THE  COUNCIL  MOVEMENT  IN   FOREIGN  COUNTRIES  13 

tional  Building  Trades  Councils  which  represent  twelve  of  the 
unions  in  the  building  trades.  They  submitted  a  memorandum 
to  the  National  Federation  of  Building  Trades  employers  of  Great 
Britain  and  Ireland,  proposing  a  "National  Industrial  Parliament 
for  the  Building  Industry."  Their  proposal  resulted  in  the  forma- 
tion in  May,  1918,  of  the  "Industrial  Council  for  the  Building  In- 
dustry." The  character  of  the  council  is  provided  for  in  its  con- 
stitution as  follows:  "The  Council  shall  consist  of  132  members, 
appointed  as  to  one-half  by  Associations  or  Federations  of  Em- 
ployers and  as  to  the  other  half  by  Trade  Unions  or  Federations 
of  Operatives."8  The  general  object  of  the  council  is  stated  in 
these  words:  "The  Council  is  established  to  secure  the  largest 
possible  measure  of  joint  action  between  employers  and  work- 
people for  the  development  of  the  industry  as  a  part  of  national 
life,  and  for  the  improvement  of  the  conditions  of  all  engaged  in 
that  industry."9 

In  order  to  accomplish  this  broad  purpose,  the  council  is  to 
devote  its  time  and  energies  to  such  constructive  work  as:  regu- 
larizing production  and  employment;  minimizing  the  fluctuations 
of  trade;  introducing  scientific  management;  reducing  costs;  im- 
proving welfare  methods;  enlarging  the  membership  of  employers' 
and  employees'  organizations;  utilizing  the  practical  knowledge 
of  the  workers;  giving  to  workers  greater  share  in  determining 
working  conditions;  making  earnings  and  employment  secure 
for  the  workers;  promoting  research  and  study  of  improvements 
in  the  works;  collecting  and  circulating  statistics  on  matters  con- 
cerning the  industry;  arranging  for  more  education  among  the 
workers;  giving  to  the  community,  through  the  press,  a  knowledge 
of  matters  affecting  the  industry  that  are  of  interest  to  the  public; 
showing  the  government  department  and  local  authorities  the 
needs  of  the  industry;  cooperating  with  the  joint  industrial  coun- 
cils of  other  industries;  having  important  matters  fully  discussed 
by  committees  of  inquiry,  joint  district  boards,  works  committees, 
trade  papers,  and  general  press. 

The  council  has  several  outstanding  features:  (i)  It  is  not  a 
means  of  handling  disputes;  it  is  for  constructive  purposes  only. 
(2)  It  proposes  to  do  away  with  the  antagonism  and  hostility 

'Bloomfield,  Meyer,  Management  and  Men,  p.  488. 
•Ibid. 


14        WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [418 

between  employers  and  men,  and  to  substitute  constructive  co- 
operation based  upon  mutual  confidence  and  good  will  to  the  end 
of  increasing  the  efficiency  of  the  building  industry.  (3)This 
group  will  consider  and  propose  legislation.  The  government  has 
consented  to  recognize  and  consult  it  as  the  spokesman  of  the  in- 
dustry on  matters  of  legislation.  (4)  This  council  is  in  a  large, 
staple,  and  highly  organized  industry.  Nearly  one  million  men 
are  employed  in  it.  (5)  It  recognizes  that  industrial  efficiency 
cannot  be  achieved  by  a  balance  of  power  between  unions  and 
employers'  associations  "with  some  Supreme  Court  of  Appeal  in 
the  background,"  but  must  be  based  on  "mutual  confidence,  real 
justice,  and  constructive  good  will."  (6)  It  provides  for  decisions 
by  a  majority  vote  of  the  whole  group,  rather  than  a  majority 
vote  within  each  group,  as  in  the  case  of  the  Whitley  Councils. 

Turning  now  from  the  national  and  district  joint  industrial 
councils  to  the  local  works  committees,  or  works  councils,  we  find 
that  in  this  case  also,  the  Whitley  works  committees  have  been 
preceded  by  a  long  experience  with  similarly  formed  works  com- 
mittees. Many  works  committees  existed  in  English  industries 
long  before  the  Whitley  movement,  and  many  exist  today  inde- 
pendent of  the  Whitley  Councils.10 

The  basis  of  these  committees  is  the  union  shop  steward.  This 
term  is  hereafter  used  to  designate  all  those  representatives  of  the 
union  workers  in  a  shop  variously  designated  by  such  terms  as: 
shop  assistants,  works  representatives,  shop  delegates,  collectors, 
yard  committeemen,  and  works  directors. 

The  functions  of  the  shop  steward  as  a  union  representative  are 
generally  to  collect  dues;  to  guard  against  defaulters;  to  investi- 
gate union  records  of  newcomers;  to  supply  the  union  district 
committee  with  information;  to  participate  and  negotiate  with 
management  respecting  grievances;  to  call  shop  meetings  to  dis- 
cuss grievances;  and  to  enforce  union  rules  in  the  shop. 

However,  as  a  rule,  shop  stewards  do  not  function  individually. 
In  all  the  larger  establishments  there  exist  many  stewards  for 
each  union.  These  stewards  commonly  elect  a  works  committee 
of  three  or  more  from  their  own  number  to  carry  on  any  of  their 

"The  following  discussion  of  works  committees  is  based  upon  the  "Report 
of  an  Inquiry  Made  by  Ministry  of  Labour,"  Industrial  Reports,  No.  2,  London, 
1918. 


419]  THE  COUNCIL  MOVEMENT   IN   FOREIGN   COUNTRIES  1$ 

functions.  Also  there  exist  many  trade  unions  within  the  same 
works.  Many  of  the  problems  which  need  to  be  handled  by 
these  committees  are  common  to  all  those  employed  in  the  works; 
therefore  there  has  developed  a  great  variety  of  works  commit- 
tees which  have  absorbed  the  general  functions  of  the  individual 
trade  union,  shop  committee,  or  works  committee.  The  shop  stew- 
ard or  the  shop  stewards  committee  of  the  particular  union 
may  still  function  separately  to  collect  the  dues  of  its  members 
and  perform  similar  union  duties;  but  in  respect  to  its  general 
work,  it  has  in  many  cases  become  a  part  of,  or  been  replaced  by, 
some  broader  works  committee  more  representative  of  all  the 
workers  in  the  shop  or  works. 

The  functions  of  these  committees,  though  varying  in  different 
places,  may  typically  be  part  or  all  of  the  following:  to  investigate 
grievances  and  present  worthy  cases  to  the  management;  to  in- 
vestigate individual  complaints  about  wages  and  piece-rates  and 
negotiate  their  adjustment  with  the  management;  to  consider 
questions  concerning  the  health  and  safety  of  the  workmen;  to 
consult  with  the  management  concerning  the  circulation  of 
awards,  orders,  and  circulars;  to  consider  generally  the  condition 
of  work  in  the  establishment;  to  arrange  shifts  and  hours  of  ad- 
mission to  the  works;  to  allocate  piece-work  and  time-work;  to 
consider  problems  of  works  discipline,  time-keeping,  methods  of 
paying  wages  and  overtime  work;  to  cooperate  with  the  manage- 
ment in  suggesting  improvements  tending  toward  greater  effi- 
ciency; to  negotiate  with  employers  concerning  discharges;  to  ne- 
gotiate with  employers  concerning  choice  of  foremen;  to  consider 
problems  of  dilution,  wage  bonuses,  changes  in  machinery,  rules 
for  apprentices,  and  various  kinds  of  welfare  work;  to  consider 
questions  of  recreation,  education,  social  insurance,  etc. 

There  are  several  typical  methods  of  electing  members  to  these 
works  committees.  They  may  be  elected  by  all  union  and  non- 
union workers  in  an  establishment,  each  department  electing  rep- 
resentatives. This  often  exists  in  shops  having  an  organization  of 
shop  stewards,  and  generally  results  in  the  election  of  these  shop 
stewards  to  works  committees.  In  other  cases  there  is  a  com- 
mittee of  all  the  shop  stewards  or  a  committee  elected  by,  and 
from  among,  the  shop  stewards  in  large  plants.  In  still  other 
cases,  elections  are  based  upon  individual  trade  unions,  each  one 


16      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [420 

choosing  representatives  in  proportion  to  its  size  within  the  shop. 
This  method  oftentimes  results  in  the  election  of  shop  stewards  to 
the  committees.  In  a  few  cases,  the  representatives  on  the  works 
committees  are  appointed  by  the  local  branches  of  the  various 
unions  involved.  This  also  quite  commonly  puts  the  shop  stew- 
ards on  the  committee. 

It  is  apparent,  therefore,  that,  prior  to  and  independent  of  the 
Whitley  council  movement,  works  committees  and  special  com- 
mittees of  workers  of  various  types  had  been  gradually  developing 
in  British  industries  for  many  years.  At  the  present  time  there 
are  few  industries  that  do  not  have  them  in  some  form.  These 
committees  have  operated,  as  a  rule,  as  an  integral  part  of,  or  at 
least  in  harmony  with,  the  trade  unions,  and  there  has  been  a 
general  tendency  for  these  committees  to  extend  their  powers  and 
broaden  their  functions.  While  these  committees  have  not  been 
constituted  as  joint  committees,  they  have  functioned  as  joint  com- 
mittees of  management  and  men.  They  have,  as  a  rule,  no  final 
authority  except  as  the  power  of  the  organization  which  they  rep- 
resent gives  them  authority. 

According  to  the  Report  of  the  Ministry  of  Labor,11  these  local 
works  councils  or  works  committees  have  proved  to  be  highly  suc- 
cessful. They  have  proved  to  be  constructive,  since  "more  im- 
provements can  be  introduced  in  an  atmosphere  of  harmony  than 
can  be  introduced  in  an  atmosphere  of  suspicion;"  produced  better 
relations  between  management  and  men;  increased  efficiency, 
because  "more  time  is  gained  by  absence  of  disputes  than 
is  lost  by  the  presence  of  discussion;"  improved  time-keeping;  in- 
creased output;  and  prevented  strikes  "by  providing  a  channel  for 
the  ventilating  of  grievances  at  an  early  stage  before  they  be- 
come acute." 

These  facts  seem  to  bear  out  at  every  point  the  theory  that 
more  democratic  industrial  management  is  conducive  to  the  re- 
moval of  distrust  and  suspicion  of  the  worker  toward  the  manage- 
ment; and  that  when  distrust  and  suspicion  have  been  removed, 
cooperation  and  increased  efficiency  result. 

2.  Whitley  Councils  in  England.  The  committee  which  has 
come  to  be  known  as  the  "Whitley  Committee,"  although 
appointed  in  October,  1916  by  the  Prime  Minister  Asquith,  was 

"Ibid. 


42 1  ]  THE  COUNCIL  MOVEMENT   IN   FOREIGN   COUNTRIES  If 

called  officially  a  "Reconstruction  Committee,"12  and  was  created 
to  deal  with  the  problem  of  reconstruction  in  the  post-war  period. 
Its  instructions  were  to  make  and  consider  suggestions  for  secur- 
ing a  permanent  improvement  in  the  relations  between  employers 
and  workmen;  and  to  recommend  means  by  which  industrial  con- 
ditions affecting  the  relations  between  employers  and  workmen 
could  be  systematically  reviewed  by  those  concerned,  with  a  view 
to  improving  such  relations  in  the  future. 

The  committee  urged  that  these  objects  could  be  attained  best 
by  the  creation  of  a  system  of  joint  industrial  councils,  which 
would  include  works  committees  composed  of  representatives  of 
the  management  and  the  workers  in  a  particular  works;  district 
councils,  composed  of  representatives  of  the  various  trade  unions 
and  employers'  associations  in  a  certain  district  within  an  in- 
dustry; and  national  joint  standing  industrial  councils,  composed 
of  representatives  of  the  national  employers'  associations  and  the 
national  trade  unions  within  an  industry. 

To  September,  1920,  sixty-eight  national  joint  industrial  coun- 
cils had  been  formed  in  compliance  with  the  recommendations  of 
the  Whitley  Committees.  Twenty  of  these  were  formed  in  1918; 
thirty-one  in  1919;  and  seventeen  in  1920.  Seven  of  these  were 
suspended,  leaving  sixty-one  in  operation,  representing  over 
3,500,000  workpeople.13 

The  functions  assumed  by  these  joint  industrial  councils  are 
practically  identical  with  those  suggested  by  the  Whitley  Commit- 
tee.14 They  have  undertaken  the  work  of  considering  measures 
for  securing  maximum  production;  considering  means  by  which 
the  greatest  possible  security  and  continuity  of  employment  shall 
be  obtained  for  employees;  encouraging  study  and  research  with  a 
view  to  the  improvement  of  the  quality  of  the  product  and 
methods  of  manufacture;  providing  facilities  for  the  full  consid- 
eration of  inventions  and  improvements  designed  by  the  work- 

12Reconstruction  Committee,  "Interim  Report  on  Joint  Standing  Industrial 
Councils,"  printed  in  full  in  Bulletin  of  the  U.  S.  Bureau  of  Labor  Statistics, 
No.  255,  Washington,  1919. 

"Bulletin  of  Ministry  of  Labour,  Industrial  Councils  Division,  No.  3,  Sep- 
tember, 1920. 

"Reconstruction  Committee,  "Interim  Report  on  Joint  Standing  Councils," 
Bulletin  oj  U.  S.  Bureau  of  Labor  Statistics,  No.  255,  p.  19. 


i8      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [422 

people,  and  the  adequate  safeguarding  of  the  rights  of  the  de- 
signers; inquiring  into  special  problems  of  the  industry,  including 
the  comparative  study  of  the  organization  and  methods  of  the  in- 
dustry in  this  and  other  countries.  All  of  these  joint  industrial 
councils  have  undertaken  the  function  of  representing  "the  needs 
and  opinions  of  the  industry  to  government  authorities  both 
central  and  local"  and  "the  consideration  of  such  matters  as  may 
be  referred  to  the  Council  by  the  government,  government  depart- 
ments, or  other  authorities." 

In  every  case,  these  councils  have  taken  over  the  function  of 
the  regular  consideration  of  wages,  hours,  and  working  conditions 
in  the  industry  as  a  whole,  with  a  view  to  improving  such  condi- 
tions and  securing  for  the  employees  the  just  share  of  the  prosperi- 
ty of  the  industry.  In  addition  to  these  duties,  many  of  the  coun- 
cils have  undertaken  to  compile  statistics  and  collect  information 
regarding  the  industry;  and  to  take  measures  to  secure  the  inclu- 
sion of  all  employers  and  workpeople  in  their  respective  organiza- 
tions. In  many  instances  also,  the  councils  have  assumed  the  func- 
tion of  providing  more  adequate  means  of  conciliation  and  arbitra- 
tion of  disputes,  and  the  supervision,  education,  and  training  of 
apprentices.  Finally,  in  all  cases  they  have  taken  over  the  work  of 
superintending  the  creation  of  district  councils  and  works  commit- 
tees in  so  far  as  they  consider  them  to  be  necessary. 

The  suggestion  in  the  Whitley  report  that  the  council  be  com- 
posed of  representatives  of  trade  unions  and  the  employers'  asso- 
ciations, with  a  due  regard  to  their  proportionate  numbers,  has 
been  carried  out  in  all  instances. 

In  September,  1920,  there  were  over  twenty-five  industries  in 
which  district  councils  had  been  set  up.  The  territorial  basis  of 
these  district  councils  is  determined  by  the  national  joint  indus- 
trial council. 

In  general,  the  constitutions  of  the  district  councils  are  the  same 
as  for  the  national  council  in  respect  to  provision  for  membership, 
reappointment,  officers,  committees,  meetings,  voting,  finance, 
keeping  of  minutes,  and  functions.  The  intention  is  that  the  dis- 
trict councils  shall  cooperate  with  the  national  council,  and  work 
under  its  direction  and  control  in  carrying  out  their  numerous 
functions  within  the  district;  and  shall  take  executive  action  re- 
specting any  of  those  functions  when  the  matter  involved  affects 


423]  THE   COUNCIL  MOVEMENT  IN   FOREIGN   COUNTRIES  19 

only  their  particular  district.  It  considers  propositions  referred 
to  it  by  the  national  council,  makes  recommendations  to  the 
national  council;  and  refers  such  matters  on  which  it  cannot 
make  a  decision  to  this  council.  All  actions  taken  by  the  district 
council  are  subject  to  veto  by  the  national  council  if  it  considers 
that  the  interests  of  other  districts  are  involved. 

In  September,  1920,  works  committees  had  been  set  up  in  twen- 
ty-five industries,  and  the  formation  of  such  committees  was 
under  consideration  in  the  national  councils  of  twelve  other  in- 
dustries. 

The  Whitley  works  committees  are  usually  joint  committees 
composed  of  representatives  from  the  workers  and  management, 
but  as  a  rule,  there  are  more  representatives  of  the  workers  than 
of  the  management.  Representatives  of  the  workers  are  elected,  in 
some  cases,  by  the  union  men  in  the  shop.  In  either  instance,  the 
committee  works  strictly  in  cooperation  with  the  trade  unions  and 
subject  to  their  national  and  district  agreements.  The  representa- 
tives of  the  workers  are  elected  for  short  terms,  elections  being 
held  by  ballot,  generally  on  the  basis  of  departments,  unless  larger 
units  are  necessary  to  keep  down  the  size  of  the  joint  committee. 

In  most  of  the  joint  works  committees,  meetings  are  held  dur- 
ing working  hours  at  regular  intervals  of  one,  two,  three,  or  four 
weeks.  The  agendum  for  the  meetings  is  distributed  to  the  mem- 
bers of  the  committee  beforehand;  unlisted  business  is  taken  up 
only  by  agreement.  Sub-committees  are  very  often  created  to 
deal  with  special  subjects.  In  case  of  questions  affecting  special 
groups  or  particular  departments,  either  the  workman  or  the  em- 
ployer, if  either  so  desires,  may  call  in  representatives  from  such 
groups  or  departments.  The  majority  of  the  constitutions  pro- 
vides for  separate  meetings  for  the  workers'  representatives  and  for 
the  election  of  a  secretary  by  the  workers'  section  of  the  com- 
mittee. In  carrying  on  his  business,  this  secretary  can  enter  any 
department  in  the  works,  and  at  any  time.  The  workers'  repre- 
sentatives are  compensated  either  by  the  workers  or  the  company, 
or  by  the  two  jointly,  for  the  time  spent  in  the  meetings. 

Subject  to  the  limitations  noted  above,  these  works  commit- 
tees perform  many  functions.  Their  most  important  work  has 
been  done  in  connection  with  the  following  subjects:  methods  of 
employment  and  discharge;  questions  of  discipline;  settlement  of 


2O      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [424 

grievances;  training  of  apprentices;  suggestions  for  improvements 
in  processes,  organization,  and  machinery;  holidays,  vacations, 
etc.;  sanitation,  ventilation,  safety,  and  many  similar  problems; 
application  of  wage  scales  and  piece  prices  to  individuals;  general 
workshop  rules;  recreation,  as  games,  dances,  etc.;  consideration 
and  encouragement  of  inventions  and  improvements  on  the  part 
of  the  workmen,  safeguarding  the  rights  of  those  responsible 
for  such  inventions  or  improvements;  and  consideration  of  any 
other  means  whereby  greater  cooperation  and  efficiency  can  be 
attained. 

In  this  system  there  is  a  regular  course  of  procedure  followed 
in  connection  with  the  taking  up  of  grievances.  The  individual 
workman  takes  his  complaint  first  to  his  departmental  represent- 
ative. If  this  representative  fails  to  effect  a  settlement,  he  carries 
it  to  a  workers'  secretary.  If  the  latter  fails,  the  question  goes 
before  the  joint  committee.  In  case  the  works  committee  dis- 
agrees, the  matter  is  taken  up,  in  some  cases,  with  the  unions  in- 
volved, or  in  other  cases,  directly  with  the  district  council.  At 
all  times,  works  councils  are  limited  by  the  powers  and  decisions 
of  the  district  or  national  councils,  or  any  existing  agreements 
between  the  trade  unions  and  the  employers.  Decisions  must  be 
reached  in  these  committees  by  unanimous  vote  or  sometimes  by 
a  majority  vote  within  the  groups  of  representatives  from  each 
side. 

The  Ministry  of  Labor,  during  the  last  two  years,  has  published 
in  the  Labor  Gazette  monthly  reports  of  the  activities  of  the 
Whitley  Councils.15  It  has  also  published  four  Bulletins  contain- 
ing summaries  of  the  activities  of  these  councils.16  A  digest  of  the 
activities  of  the  Whitley  Councils  has  been  compiled  by  bringing 
together  the  material  found  in  all  these  reports  and  analyzing  and 
classifying  it.  The  following  discussion  is  based  upon  this  digest: 

At  the  time  that  the  Whitley  Councils  were  initiated,  many 
bodies  for  the  settling  of  disputes  already  existed.  It  was  speci- 
fically stated  by  the  Ministry  of  Labor  that  the  Whitley  Councils 
were  not  intended  as  substitutes  for  these  existing  bodies.  How- 

"See  files  of  the  Labor  Gazette,  Ministry  of  Labor,  Whitehall,  London,  for 
years,  1921,  1922. 

"Joint  Industrial  Councils,  Bulletin  of  Ministry  of  Labor,  Industrial  Coun- 
cils Division,  Nos.  I,  2,  3,  4. 


425]  THE  COUNCIL  MOVEMENT  IN   FOREIGN   COUNTRIES  21 

ever,  one  of  the  functions  definitely  assigned  to  them  was  "the 
establishment  of  regular  methods  of  negotiation  arising  between 
employers  and  workmen."  The  intention  of  the  government  in 
this  respect  has  been  carried  out.  The  Whitley  Councils  have  not 
been  used  extensively  for  the  purpose  of  settling  disputes.  The 
reports  of  the  Ministry  of  Labor  devote  considerable  space  to 
the  subject  of  disputes  and  conciliation,  but  an  analysis  of  these 
reports  shows  that  the  councils  have  devoted  their  attention  chief- 
ly to  setting  up  various  types  of  conciliation  and  arbitration  com- 
mittees, either  local,  district,  or  national  in  character. 

The  subject  which  has  received  the  most  attention  in  Whitley 
Councils  is  that  of  wages.  The  reports  of  the  Ministry  of  Labor, 
covering  activities  of  the  Whitley  Councils  up  to  1922,  show  that 
the  national  joint  industrial  councils  have  adopted  new  wage 
scales  in  ninety-five  cases.  Of  these,  forty  have  been  general  wage 
reductions;  eighteen  have  been  wage  increases;  and  thirty-seven 
have  been  concerned  with  readjustment  of  piece-rates,  bonus  plans, 
overtime  pay,  and  holiday  pay.  In  the  last  group,  the  reports  do 
not  designate  whether  the  rates  have  been  higher  or  lower  than 
the  rates  previously  existing.  In  connection  with  forty-five  of 
these  wage  agreements,  there  has  been  adopted  a  national  mini- 
mum wage. 

Next  to  wages,  the  question  of  hours  has  received  most  atten- 
tion by  the  Whitley  Councils.  The  records  show  that  twenty-eight 
agreements,  establishing  new  regulations  for  the  length  of  the 
working  day,  have  been  made  in  the  Whitley  national  joint  in- 
dustrial councils.  In  at  least  fifteen  of  these  cases,  the  forty-seven 
hour  week  has  been  adopted  for  the  entire  industry  concerned. 
The  majority  of  the  others  have  established  the  forty-eight  hour 
week.  In  the  china  clay  industry  an  agreement  has  been  reached 
establishing  the  forty-two  hour  week  with  the  reduction  of  wages. 
In  all  these  cases  there  has  been  a  reduction  of  the  length  of  the 
working  day,  and  in  a  majority  of  these  this  has  been  done  with- 
out a  reduction  of  wages. 

The  question  of  apprenticeship  has  received  almost  as  much 
attention  in  the  Whitley  Councils  as  the  question  of  hours.  Twen- 
ty-five of  the  national  joint  councils  have  appointed  special  com- 
mittees to  formulate  national  rules  and  regulations  for  governing 
the  supply  and  training  of  apprentices.  Among  the  industries  that 


22      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [426 

have  already  adopted  the  reports  of  such  committees  are  the  fol- 
lowing: bobbin  making,  electrical  contracting,  building,  pottery 
making,  cooperage,  Scottish  baking,  heating  and  domestic  en- 
gineering, glove  making,  and  optical  instrument  manufacturing. 

The  two  topics,  research  and  statistics,  are  classed  together  in 
the  reports  of  the  Ministry  of  Labor.  The  topics  which  have  been 
the  object  of  special  research  by  sub-committees  of  Whitley  na- 
tional joint  industrial  councils  are  wages,  prices,  methods  of  de- 
termining prices,  profits,  scientific  management,  reduction  of  costs, 
workshop  conditions,  apprenticeship  laws  and  rules,  housing, 
standardization  of  rates,  reduction  of  costs,  and  the  cost  of  living. 

Further  activities  of  the  councils  have  been  concerned  with 
plans  to  bring  all  workers  and  employers  within  their  respective 
organizations;  with  the  publishing  of  books  describing  their  work 
and  aims;  with  matters  of  welfare  and  safety;  with  means  of  en- 
forcing agreements;  with  unemployment;  and  with  workmen's 
compensation.  The  reports,  however,  do  not  show  that  very  ex- 
tensive results  have  been  accomplished  in  these  matters. 

This  brief  review  of  the  work  of  the  Whitley  national  joint  in- 
dustrial councils  shows  that  their  attention  has  been  directed 
chiefly  to  the  consideration  of  wage  scales,  hours,  working  condi- 
tions, apprenticeship,  and  similar  matters  that  have  always  been 
the  principal  subject  matter  of  trade  agreements.  Over  ninety 
national  trade  agreements  have  been  formulated  by  these  coun- 
cils. In  respect  to  subjects  dealt  with,  the  Whitley  Councils  have 
not  differed  from  those  annual  or  occasional  joint  councils  which 
have  been  held  for  many  years  in  most  English  industries  for  the 
purpose  of  formulating  trade  agreements.  One  notable  exception 
to  this  statement  is  found  in  the  work  of  the  Building  Trade 
Council  in  introducing  scientific  management  into  the  building 
industry. 

Some  of  the  functions  assigned  to  the  Whitley  Councils  in  the 
Whitley  Report,  and  subsequently  included  in  the  constitution  of 
these  councils,  receive  little,  if  any,  mention  in  the  government  re- 
ports. The  better  utilization  of  the  practical  knowledge  and  ex- 
perience of  the  workpeople;  the  provision  of  facilities  for  the  full 
consideration  and  utilization  of  inventions  and  improvements  de- 
signed by  workpeople,  and  for  the  adequate  safeguarding  of  the 
rights  of  the  designers  of  such  improvements;  the  improvements 


427]  THE  COUNCIL  MOVEMENT  IN   FOREIGN   COUNTRIES  23 

of  processes,  machinery  and  organization,  are  functions  which  it 
was  intended  that  the  Whitley  Councils  should  perform.  The  Re- 
ports of  the  Ministry  of  Labor  concerning  the  work  of  these  coun- 
cils make  no  reference  to  such  activities. 

The  evidence  which  has  been  reviewed  affords  sufficient  basis 
for  the  conclusion  that  the  Whitley  Councils  have  constituted  an 
important  development  in  English  industrial  management.  The 
employers  and  the  organized  workers  in  more  than  sixty  English 
industries  have  been  brought  together  in  these  councils,  and  have 
there  jointly  considered  and  settled  many  important  problems  in 
the  light  of  facts  ascertained  by  joint  investigations.  This  inti- 
mate and  continuous  association  for  the  purpose  of  attaining  in- 
dustrial peace  and  cooperation,  and  the  extensjve  work  of  the 
joint  sub-committees  of  these  councils  in  ascertaining  facts  upon 
which  to  base  decisions  and  agreements,  are  the  distinctive  accom- 
plishments of  the  Whitley  Councils. 

However,  these  Whitley  national  and  district  joint  councils 
are  similar  in  their  essential  characteristics  to  the  joint  conferences 
which  have  long  existed  in  English  industry.  They  are,  in  each 
case,  joint  councils  of  representatives  of  the  unions  and  the  em- 
ployers, in  which  decisions  are  made  not  by  majority  vote,  but 
by  agreement.  The  Whitley  Councils  are  of  a  more  fixed  and 
permanent  character,  in  that  they  meet  more  regularly  and  have 
a  permanent  personnel  and  the  members  are  elected  for  a  fixed 
term  of  office.  The  older  type  of  joint  conferences  met,  as  a  rule, 
only  when  emergency  arose  or  new  agreements  were  to  be  ne- 
gotiated; and  then  members  were  elected  only  for  the  particular 
occasion. 

It  is  true  that  the  Whitley  Councils  differ  from  the  older  type 
of  joint  councils  in  some  of  their  proposed  functions.  The  older 
type  of  councils  generally  performed  no  further  function  than  the 
formation  of  the  typical  trade  agreement.  The  Whitley  Councils, 
however,  have  been  assigned  broad  constructive  work,  such  as  the 
consideration  of  means  for  the  better  utilization  of  the  practical 
knowledge  of  the  workers;  the  means  of  securing  for  the  work- 
people the  greatest  possible  security  of  earning  and  employment; 
technical  education  and  training;  industrial  research;  facilities  for 
full  consideration  of  inventions  made  by  the  workers  and  for  safe- 
guarding the  workers'  rights  therein;  improvements  in  processes, 


24      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [428 

machinery,  and  organization;  and  proposed  legislation  for  the  in- 
dustry. It  is  these  broad  constructive  functions  of  the  Whitley 
Councils  that  are  supposed  to  differentiate  them  most  clearly 
from  previously  existing  joint  councils.  However,  the  analysis  of 
the  work  which  the  Whitley  committees  have  thus  far  performed 
indicates  that  though  they  have  made  some  substantial  progress 
toward  constructive  joint  industrial  management,  they  have  been 
chiefly  occupied  with  the  same  problems  which  have  occupied  the 
time  of  joint  councils  in  the  past,  i.  e.,  wages,  hours,  holidays, 
overtime,  working  conditions,  and  the  like. 

The  same  difference  in  proposed  functions  is  to  be  noted  in  this 
case  as  in  the  case  of  the  national  joint  councils.  The  Whitley 
Committees  have  nominally  assumed  broader  and  more  con- 
structive functions;  but  on  the  whole,  their  activities  have  been 
concerned  with  the  same  problems  which  have  absorbed  the  at- 
tention of  other  works  committees  of  the  past  and  present. 

B.  THE  COUNCIL  MOVEMENT  IN  GERMANY 

In  1891,  there  was  passed  in  Germany  a  labor  law  which  pro- 
vided for  the  creation  of  workmen's  committees  in  German  fac- 
tories.17 These  committees  were  to  cooperate  with  the  manage- 
ment in  the  making  of  rules  and  the  regulating  of  working  condi- 
tions. In  a  few  of  the  factories  they  were  created  and  manipu- 
lated as  a  weapon  against  the  trade  union  movement.  Also,  be- 
fore the  war,  laws  were  passed  in  various  individual  states  in 
Germany  which  made  it  obligatory  upon  mining  concerns  employ- 
ing over  one  hundred  men  to  give  workers  representation  through 
committees  for  the  control  of  working  conditions  in  the  mines. 
These  committees  were  to  meet  with  the  employers  to  settle  all 
disputes  and  to  "discuss  proposals,  wishes,  and  complaints  of  the 
workers  concerning  their  working  contract."  When  an  agreement 
could  not  be  reached  in  such  meetings,  the  questions  under  consid- 
eration were  referred  to  arbitration. 

This  was  a  very  noteworthy  advance  in  the  direction  of  indus- 
trial democracy.  One  German  writer  says  in  this  respect: 

"These  committees  were  the  forerunners  of  the  later  Be- 
triebsrate  (works  councils).  While  the  social  protection  of  the 

"Ohse,  H.,  Annals  of  the  American  Academy  of  Political  and  Social  Science, 
Vol.  XCII,  November,  1920,  p.  54. 


429]  THE  COUNCIL   MOVEMENT   IN   FOREIGN   COUNTRIES  25 

employee  was  diminished  during  the  war,  the  social  determination 
of  the  workingman  and  salaried  employee  gained  ground  in  in- 
dustrial establishments  through  the  organization  of  workers.  The 
authority  of  the  employer  was,  therefore,  already  overthrown  be- 
fore the  revolution  started."18 

The  revolution  in  Germany  occurred  in  November,  1918.  Al- 
most simultaneously  with  the  revolution,  there  sprang  up  a  multi- 
tude of  councils  among  the  workmen,  soldiers,  sailors,  and  pea- 
sants. It  has  been  estimated  that  there  were  over  ten  thousand  of 
these  councils  in  existence  during  the  winter  of  1918-19. 

These  councils  were  very  heterogeneous  in  nature.  They  were 
chiefly  inspired  and  led  by  the  Spartacists  and  radical  Socialists  of 
the  extreme  left,  but  were  also  supported  by  many  of  the  more 
conservative  Socialists,  as  well  as  many  members  of  the  numerous 
other  political  parties.  They  were  not  only  heterogeneous  in  re- 
spect to  the  political  affiliations  of  their  members,  but  were  also 
very  diverse  in  form.  At  the  top  were  two  large  councils,  the 
Council  of  Greater  Berlin,  and  the  Council  of  the  People's  Com- 
missioners. Below  these  were  various  gradations,  based  upon  a 
wide  variety  of  constituencies.  They  included  communal  councils, 
factory  councils,  regimental  and  company  councils,  and  sailors' 
councils.19 

Late  in  November,  1919,  these  councils  assumed  supreme 
power  in  the  government,  and  called  a  congress  of  workmen's  and 
soldiers'  councils  from  all  Germany  to  meet  December  16.  This 
congress  was  dominated  by  the  moderate  Socialists  and  conserva- 
tive parties.  They  elected  Herr  Ebert  president.  Herr  Ebert's 
government  immediately  issued  a  program  which  promised 
among  many  other  things,  "the  control  of  wages  and  conditions  of 
employment  by  organizations  of  employers  and  employees."  This 
was  an  effort  to  conciliate  the  radical  elements.  Notwithstanding 
this,  the  government  immediately  set  to  work  to  remove  the  fangs 
from  the  existing  councils  by  gradually  stripping  them  of  all  polit- 
ical power  and  replacing  them  by  workers'  and  employees'  com- 
mittees. The  supporters  of  the  council  movement  were  not  satis- 
fied with  the  new  conditions  and  never  ceased  their  agitation  for 

"Sinzleimer,  Hugo,  "Development  of  Labor  Legislation  in  Germany,"  Annals 
of  the  American  Academy  of  Political  and  Social  Science,  Vol.  XCII,  p.  31. 
"Laidler,  H.  W.,  Socialism  in  Thought  and  Action,  Chapter  XII. 


26      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [430 

more  democratic  control  of  industry.  As  a  result  of  their  agita- 
tions and  the  other  influences  which  had  been  working  toward 
this  more  democratic  control  of  industry,  Article  165,  which  pro- 
vides for  works  councils  in  German  industries,  was  incorporated 
into  the  German  constitution  July  31,  1919. 

In  explanation  of  their  support  of  Article  165  in  the  new  con- 
stitution, the  German  national  government  issued  a  detailed  an- 
nouncement in  March,  1919,  in  which  they  expressed  the  follow- 
ing interpretation  of  the  works  council  movement: 

"The  conception  underlying  the  movement  for  the  formation  of 
these  councils  is  of  a  two-fold  nature.  The  worker,  as  such,  is 
striving  for  the  direct  and  independent  assertion  of  his  interests 
within  the  works  at  which  he  is  employed;  and  also,  as  one  of  the 
general  public,  is  striving  to  achieve  the  right  to  cooperate  in  the 
process  of  production  itself,  a  process  in  which  his  employer  has 
hitherto  had  sole  control,  his  desire  being  to  cooperate  in  a  status 
superior  to  that  of  a  mere  wage-earner,  i.  e.,  from  a  position  which 
will  afford  him  a  view  of  his  industry  as  a  whole;  so  that  he  may 
help  toward  its  development."20  This,  of  course,  was  a  very  mild 
interpretation  of  the  underlying  current  in  the  works  council 
movement;  and  perhaps  stated  more  accurately  what  the  govern- 
ment desired  the  works  council  movement  to  be  and  what  they 
proposed  to  make  of  it. 

The  militant  advocates  of  the  works  council  movement  desired 
to  make  the  works  council  system  the  very  fundamental  basis  of 
the  government,  not  only  of  industry,  but  of  all  phases  of  German 
life.  The  moderate  government,  however,  was  in  control,  and  the 
new  constitution  was  adopted,  with  the  council  movement  con- 
fined to  the  status  defined  in  Article  165  which  reads  in  part  as 
follows : 

"Workers  and  salaried  employees  are  called  upon  to  cooperate 
in  conjunction  with  the  employers,  on  equal  footing,  in  the  settle- 
ment of  the  conditions  of  pay  and  work  as  well  as  in  the  economic 
development  of  the  productive  forces.  The  organization  of  both 
and  their  agreements  are  recognized.  The  workers  and  salaried 
employees  are,  for  the  purpose  of  securing  their  social  and  eco- 
nomic interests,  given  legal  representation  in  the  form  of  shop 

^Monthly  Labor  Review,  U.  S.  Bureau  of  Labor  Statistics,  September,  1919, 
p.  125- 


43  I  ]  THE  COUNCIL   MOVEMENT  IN  FOREIGN   COUNTRIES  2J 

councils,  as  well  as  district  labor  councils,  organized  according  to 
industries,  and  a  Central  Labor  Council,  (Reichsarbeiterrat)." 
Only  the  short  interval  between  July  31  and  August  21  elapsed 
between  the  passage  of  the  broad  constitutional  guarantees  and  the 
introduction  to  the  Assembly  of  a  bill  to  provide  the  machinery 
and  regulations  for  putting  these  guarantees  into  practice.  The 
law  was  passed  January  18.  1920,  and  went  into  effect  some  time 
in  February.  The  law,  as  finally  passed,  contained  the  following 
significant  features: 

1.  Object.  For  securing  the  economic  interests  of  the  employees 
against  the  employer  and  for  supporting  the  employer  in  the  ful- 
fillment of  the  purposes  of  his  establishment,  shop  councils  must 
be  created  in  all  the  establishments  where  usually  at  least  twenty 
employees  are  occupied.   Agricultural,  commercial,  and  industrial 
establishments  are  included. 

2.  Nature  of  Works  Councils.    The  works  council  is  elected  by 
all  manual  and  salaried  workers.    A  separate  workers'  council  is 
elected  by  the  manual  workers,  to  look  after  the  interests  peculiar 
to  their  group.    A  salaried  employees'  council  is  elected  by  the 
salaried  employees,  to  supervise  their  group  interests. 

3.  The  Works  Assembly.   All  the  workers  of  the  establishment 
constitute  a  works  assembly.    Separate  works  assemblies  may  be 
held  by  the  manual  workers  and  by  the  salaried  employees.  The 
employer  may  be  represented,  but  cannot  vote  in  these  assem- 
blies. 

4.  Time  of  Meetings.   All  meetings  of  the  various  councils  are 
held  regularly  outside  of  working  hours.   Exceptions  are  reported 
to  the  employer.  Meetings  of  the  works  assemblies  are  held  out- 
side of  working  hours  except  when  the  employer's  consent  to 
meetings  during  working  hours  is  obtained. 

5.  Compensation.    Members  of  the  councils  are  not  compen- 
sated.   Necessary  loss  of  time,  due  to  attendance  at  meetings  of 
the  council,  does  not  entail  reduction  in  wages  or  salary. 

6.  Functions  of  the  Works  Council.   The  works  council  is  ex- 
pected to  aid  the  management  in  every  way  possible  to  secure  the 
most  efficient  and  economic  conduct  of  the  business,  and  to  co- 
operate in  furthering  the  introduction  of  improvements  in  produc- 


28      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [432 

tive  processes.  At  the  council's  request  the  employer  must  con- 
vene a  monthly  meeting  to  discuss  jointly  improvements  in  plant, 
machinery,  and  administrative  methods. 

The  council  is  to  protect  the  establishment  from  disturbances 
arising  from  disputes  among  the  workers  or  between  the  workers 
and  employers.  If  such  disputes  cannot  be  settled  by  negotiation, 
the  councils  of  manual  workers  and  salaried  employees  name  an 
arbitration  committee. 

The  works  council  sees  that  the  awards  of  the  arbitration  com- 
mittee are  carried  out;  negotiates  new  shop  regulations  in  modifi- 
cation of  existing  agreements  with  the  employer;  strives  to  pro- 
mote harmony  among  the  workers  and  between  them  and  the 
employers;  strives  to  maintain  the  independence  of  the  unions; 
has  power  to  hear  the  grievances  of  the  workers  and  to  negotiate 
with  the  employer  concerning  them;  and  has  power  to  participate 
in  the  administration  of  housing,  pension  funds,  and  other  wel- 
fare projects. 

7.  Functions  of  the  Manual  Workers'  and  Salaried  Employees' 
Councils.  The  manual  workers'  and  salaried  employees'  councils 
enforce  within  their  group  standard  wage  agreements  and  awards 
of  the  arbitration  committee;  cooperate  with  the  unions  in  secur- 
ing wage  agreements  when  such  agreements  do  not  already  exist; 
regulate  the  hours  of  work;  fix  rules  respecting  vacations;  handle 
matters  pertaining  to  apprentices;  adjust  complaints  between 
members  of  their  group  and  the  employer;  appoint  arbitration 
committees  when  necessary;  call  attention  to  unsanitary  or  dan- 
gerous conditions  in  the  establishment;  cooperate  with  inspection 
officials  by  giving  advice  and  information;  aid  in  enforcing  police 
and  safety  regulations;  cooperate  with  the  employer  in  estab- 
lishing rules,  hiring  and  discharging  workers  or  employees;  and 
cooperate  in  the  aid  of  those  injured  in  war  or  by  accident. 

These  councils  may  also  investigate  and  negotiate  with  the  em- 
ployer concerning  cases  of:  dismissals  for  political,  military,  reli- 
gious, or  trade  union  activities;  unjustifiable  discharge  not  due  to 
the  conduct  of  the  employee  or  the  condition  of  the  establishment; 
discharge  without  notification  of  cause;  or  dismissal  for  refusing 
to  do  work  not  called  for  under  existing  contracts  or  agreements. 


433]  THE  COUNCIL  MOVEMENT  IN   FOREIGN  COUNTRIES  29 

If  no  agreement  is  reached  by  negotiation  between  the  employer 
and  the  manual  workers'  or  salaried  employees'  councils,  the  case 
goes  to  the  arbitration  board  whose  decision  is  final. 

8.  Relation  to  Trade  Unions.   Among  the  various  duties  of  the 
works  council  is  the  provision  that  it  shall  strive  to  preserve  the 
integrity  and  independence  of  the  workers'  organizations  in  nego- 
tiating for  working  agreements  with  the  employers.   The  right  of 
appeal  to  arbitration  is  given  in  the  case  of  dismissal  on  account 
of  trade  union  activities.  Representatives  of  the  trade  unions  may 
take  part  in  the  meetings  of  these  works  councils  on  demand  of 
one-fourth  of  the  members  of  the  council.    (Associations  of  which 
the  employer  is  a  member  may  also  be  represented  in  negotiations 
with  the  works  council.)  There  is  express  provision  that  the  rights 
of  all  legal  existing  workers'  organizations  shall  be  preserved.  The 
effort  is  made  to  make  it  clear  that  the  law  is  meant  as  an  aid  and 
supplement  to  the  trade  unions;  not  as  a  substitute.   The  works 
council  can  negotiate  with  the  employers  only  concerning  new 
rules  of  service,  or  correction  of  existing  rules,  when  such  negotia- 
tions do  not  conflct  with  existing  agreements  formed  in  other 
ways. 

9.  Rights    of    Works    Councils   Respecting   Information   from 
Company.   Concerns  employing  over  three  hundred  workers  and 
fifty  salaried  employees,  must,  if  these  works  councils  desire,  pre- 
sent to  the  workers'  representatives  an  annual  balance  sheet  show- 
ing profits  and  loss  for  the  last  year.    In  works  which  have  no 
board  of  directors,  the  employer  must  furnish  the  council  with 
information  affecting  all  matters  involving  the  workers'  interests, 
and  must,  if  the  council  desires,  present  a  quarterly  report  of 
the  standing  and  progress  of  the  industry  in  general.    In  works 
having  a  board  of  directors,  the  council  may  have  two  represent- 
atives upon  such  a  board,  to  gain  information  as  to  business  con- 
ditions. These  requirements  carry  the  qualifications  that  such  in- 
formation as  might  endanger  business  secrets,  and  therefore  the 
welfare  of  the  industry,  need  not  be  revealed  to  the  works  council. 
It  is  also  provided  that  members  of  the  works  council  are  bound 
to  preserve  secrecy,  upon  penalty  of  heavy  fines  and  imprison- 
ment, respecting  all  information  of  a  confidential  nature  revealed 
to  them. 


30      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [434 

This  law  went  into  effect  February  4,  1920.  Within  six  weeks 
from  that  time  all  industries  were  to  have  elected  works  coun- 
cils. The  councils  were  to  supersede  all  existing  workers'  commit- 
tees. The  law  has  been  generally  complied  with,  and  the  works 
councils  formed,  but  there  has  been  a  tremendous  number  of 
conflicts  regarding  its  interpretations.  It  is  assumed,  however,  that 
such  conflicts  will  gradually  be  settled,  and  a  generally  accepted 
interpretation  of  the  law  will  be  developed. 

It  was  bitterly  opposed  both  by  employers  and  by  the  workers, 
and  its  final  form,  as  summarized  above,  was  a  compromise  which 
gave  very  little  satisfaction  to  either  group.  The  workers'  forces 
are  directing  their  criticism  at  two  or  three  points  in  particular.  In 
the  first  place,  they  are  dissatisfied  with  the  provisions  relating 
to  the  handling  of  employment,  discharge,  and  shutdowns  in  the 
plants.  These  were  among  the  most  bitterly  contested  provisions 
of  the  bill.  The  workers,  it  seems,  were  particularly  anxious  to 
place  the  control  of  hiring,  firing,  transferring  of  workers,  and  sus- 
pension of  work  in  a  joint  council  in  which  the  men  would  have 
at  least  equal  authority  with  the  management.  They  wished  to 
end  the  arbitrary  control  over  the  personnel  which  had  existed  for 
so  long  a  time.  Discrimination  against  labor  leaders  and  union 
men  could  thus  have  been  eliminated,  and  that  security  of  em- 
ployment gained  which  is  felt  to  be  so  fundamental  to  the  welfare 
and  efficiency  of  the  worker,  as  well  as  so  necessary  if  he  is  to 
have  the  courage  to  carry  on  his  fight  fearlessly  against  the  em- 
ployer. 

As  the  law  stands  on  these  points  the  workers  feel  that  they 
were  defeated.  The  councils  have  a  right  only  to  cooperate  with, 
and  give  advice  to,  the  employer  respecting  policies  of  em- 
ployment, discharge,  transfers,  and  shutdowns.  They  can  advise, 
but  the  employer  is  free  to  reject  their  advice.  The  only  definite 
power  held  by  the  councils  on  these  points  is  that  given  in  the 
summary  above,  which  allows  them  in  certain  specified  cases  to 
investigate  dismissals;  "negotiate  with  the  employer  concerning 
them;"  and  if  unable  to  come  to  an  agreement  with  him,  to  have 
them  referred  to  arbitration.  This  is  of  considerable  value  in  the 
cases  specified,  but  is  very  limited  as  compared  to  the  desires  of 
the  workers.  One  German  writer  says  of  these  provisions:  "This 
fallacy  of  the  law  is  one  of  the  chief  reasons  for  the  passionate 


435]  THE  COUNCIL  MOVEMENT  IN   FOREIGN   COUNTRIES  31 

criticisms  directed  against  it  by  the  workers,  even  in  these  days. 
The  first  supplementary  law  will  have  to  provide  for  new  regu- 
lations of  cooperation  in  shutdowns  and  dismissals."21 

A  second  point  which  was  bitterly  contested,  was  the  provision 
respecting  the  right  of  the  works  council  to  have  inside  informa- 
tion respecting  the  affairs  of  the  business.  The  Socialists  were 
particularly  active  in  demanding  this  right.  The  employers  op- 
posed it  as  dangerous  to  the  welfare  of  their  concern,  and  there- 
fore the  general  welfare.  The  workers  do  not  feel  that  they  were 
entirely  defeated  on  this  point,  for,  as  noted  above  in  the  sum- 
mary, the  works  councils  can  demand  fairly  adequate  information 
in  most  cases.  However,  much  criticism  has  been  directed  toward 
the  provisions  that  such  information  must  be  kept  secret  by  the 
council.  This  provision  makes  it  impossible  for  the  representa- 
tives to  report  to  the  workers  the  causes  for  their  actions,  or  to 
consult  with  the  workers  as  to  their  wishes  respecting  many  ques- 
tions. But  under  the  existing  industrial  scheme  in  Germany,  the 
compromise  by  which  the  workers'  representatives  may  be  in- 
formed of  the  business  secrets  in  their  concern  seems  to  the  moder- 
ate and  conservative  forces  in  Germany  to  be  all  that  any  fair- 
minded  worker  could  expect. 

A  third  and  more  general  criticism  which  is  directed  toward  the 
works  council  law  is  that  the  law,  as  a  whole,  fails  to  grant  to  the 
workers  a  sufficient  share  in  the  management  of  the  industries  to 
gain  the  ends  desired.  It  is  pointed  out  that  due  to  the  war  and 
subsequent  events,  the  efficiency  of  German  industry  has  de- 
clined to  such  an  extent  that  the  nation  as  a  whole  is  suffering 
serious  effects.  The  workers  have  been  demanding  a  large  share 
in  the  control  of  industry.  Their  efficient  cooperation  in  the  re- 
construction program  can  be  obtained  only  at  the  price  of  a  sub- 
stantial concession  to  this  demand.  It  is  urged  that  a  share  in 
control  sufficient  to  gain  this  objective,  must  be,  at  the  least, 
equal  representation  in  joint  councils  in  which  all  matters  of  in- 
terest to  the  working  men,  such  as  wages,  hours,  conditions,  dis- 
charges, and  discipline  would  be  settled  or  referred  to  an  ap- 
proved board  of  arbitration. 

"Aufhauser,  S.,  Annals  of  the  American  Academy  of  Political  and  Social 
Science,  Vol.  XCII,  November,  1920,  p.  51. 


32      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [436 

The  fact  that  the  present  law  does  not  grant  any  ultimate  au- 
thority to  the  works  councils  cannot  be  questioned.  In  all  cases 
they  have  power  only  to  cooperate  with,  or  to  advise,  the  employ- 
er who  is  left  free  to  reject  their  advice.  The  government's  state- 
ment in  March,  1919,  respecting  the  works  council  law  stated  that 
the  law  did  not  intend  to  curtail  the  employer's  right  to  run  his 
business  as  he  saw  fit.  To  what  extent  the  works  councils,  as 
created,  will  gain  the  efficient  cooperation  of  the  mass  of  the 
workers,  we  have  as  yet  no  very  accurate  evidence.  General  press 
reports  seem  to  indicate  that  labor  troubles  have  increased  rather 
than  abated  in  Germany. 

The  trade  unions  are  apprehensive  of  these  new  organizations. 
There  has  been  a  considerable  amount  of  labor  unrest,  breaking 
out  here  and  there  in  acute  labor  troubles,  because  of  the  con- 
flict between  the  trade  union  forces  and  the  supporters  of  the 
works  councils.  At  a  Works  Council  Congress  held  in  Berlin, 
October,  1920,  the  power  of  the  trade  unions  within  the  works 
council  movement  was  evidenced  by  the  fact  that  all  the  delegates 
were  members  of  trade  unions.  This  congress  discussed  the  grow- 
ing dispute  as  to  whether  there  should  be  an  independent  central 
organization  of  works  councils,  or  whether  such  a  central  organiza- 
tion should  be  definitely  coordinated  with  the  central  trade  union 
organizations.  The  policy  of  coordination  with  the  trade  unions 
was  approved.  However,  this  congress  was  not  convened  in  ac- 
cord with  any  provision  of  the  works  council  law. 

The  present  relationship  between  the  unions  and  the  works 
councils  has  been  described  as  follows: 

"The  trade  unions  remain,  as  formerly,  the  professional  repre- 
sentative of  the  interests  of  the  workers  and  employees.  However, 
they  have  fully  realized  the  necessity  of  recognizing  the  indus- 
trial council  as  a  new  confederate  in  the  emancipation  of  the 
workers,  and  the  necessity  of  making  possible  a  systematic  co- 
operation of  council  and  trade  unions.  According  to  this  arrange- 
ment, the  control  of  production  is  looked  upon  as  a  peculiar  field  of 
the  industrial  councils  while  the  trade  unions  are  making  arrange- 
ments for  the  training  of  the  councils.  The  attempts  to  create 
independent  organizations  of  industrial  councils  separate  from 
the  trade  unions  have  not  been  accompanied  by  success.  On  the 


437]  THE   COUNCIL  MOVEMENT   IN   FOREIGN   COUNTRIES  33 

contrary,  one  can  definitely  state  that  with  the  growing  impor- 
tance of  the  councils,  the  power  of  the  trade  unions  has  increased 
simultaneously."22 

The  general  attitude  of  the  unions  seems  to  be  that  the  diplo- 
matic course  for  them  to  follow  is  to  dominate  the  works  councils 
and  use  them  to  further  the  interests  of  organized  labor.  If  this 
policy  is  followed  successfully,  the  works  councils  will  become  an 
aid  to  the  unions.  The  employers  in  Germany  are  well  organized. 
The  Union  of  German  Employers'  Federations  is  a  powerful 
body,  combining  130  national  federations  of  employers,  and  repre- 
senting employers  of  over  4,000,000  workers.  The  opposition  of 
this  union  to  the  works  council  law  was  very  bitter.  Its  final 
modified  form  was  due  largely  to  their  efforts.  Some  light  has 
been  thrown  on  the  attitude  of  the  German  employers  toward 
the  works  council  law  by  a  secret  circular  letter  which  their  as- 
sociation sent  out.  A  copy  of  this  letter  was  obtained  by  the 
workers  and  was  published.  It  stated: 

"The  plans  for  a  general  strike  of  the  employers  against  the 
enactment  of  the  works  council  law  have  not  been  carried  out, 
owing  to  reasons  of  expediency.  It  is  also  not  intended  to  use  sa- 
botage against  the  law.  Employers  are,  however,  urgently  re- 
quested to  adopt  a  strong  defensive  attitude  in  the  application  of 
the  law  against  all  attempts  to  go  beyond  the  letter  of  the  law 
made  either  by  the  regulations  for  the  enforcement  of  the  law  or 
by  the  workers.  Employers  are  especially  admonished  against 
making  concessions  in  the  application  of  Article  62  of  the  law 
(which  provides  cases  where  councils  need  not  be  formed).  In  the 
framing  of  shop  regulations  and  in  the  conclusion  of  collective 
agreements,  employers  should  not  go  beyond  the  bound  of  legal 
obligations."23 

C.  WORKS  COUNCIL  LAW  OF  AUSTRIA 

A  law  which  went  into  effect  July  25,  1919  in  Austria,  provided 
for  compulsory  works  councils  in  all  establishments  having  over 
twenty  employees.  The  principal  functions  of  these  works  coun- 
cils are:  attending  to  the  concluding,  maintaining,  and  interpret- 

"Monthly  Labor  Review,  U.  S.  Bureau  of  Labor  Statistics,  March,   1921, 
p.  130. 

"Ibid.,  p.  131. 


34      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  (438 

ing  of  collective  agreements  in  cooperation  with  trade  unions;  fix- 
ing piece-work,  time,  and  average  and  minimum  wages,  where  not 
fixed  by  agreements;  cooperating  in  the  concluding  and  amending 
of  labor  contracts;  supervising  enforcement  of  labor  laws;  cooper- 
ating in  maintaining  discipline;  examining  pay-rolls  and  controlling 
payment  of  wages;  and  participating  in  management  of  all  wel- 
fare institutions. 

Among  the  privileges  which  the  law  accords  to  the  works  coun- 
cils are  the  right  to  appeal,  if  they  desire,  to  a  Board  of  Concilia- 
tion for  settlement  of  cases  of  discharge  for  political  or  trade  union 
affiliations;  to  demand  a  yearly  balance  sheet,  a  profit  and  loss 
account,  and  statistics  of  wages  paid  in  establishments  having 
thirty  or  more  employees;  and  in  joint  stock  companies  to  elect 
two  members  to  the  Board  of  Directors. 

All  employees  over  eighteen,  employed  at  least  one  month,  can 
vote;  but  to  be  eligible  to  the  council  an  employee  must  be  twen- 
ty-four years  of  age  and  have  been  employed  in  the  works  at  least 
six  months.  One-fourth  of  the  council  may  be  elected  from  mem- 
bers of  the  Executive  Committee  of  a  trade  union  to  which  the 
employees  in  the  works  belong. 

Arbeiterkammern,  or  Workers'  Chambers,  have  also  been 
created  in  Austria  since  the  war.  Members  are  elected  by  the 
workers  in  a  community.  The  functions  of  these  Chambers  are 
"to  give  reports,  memoranda,  and  proposals  concerning  the  regu- 
lation and  protection  of  labor,  workers'  insurance,  and  aid  for 
workers,  to  the  authorities  and  legislative  corporations  for  use  in 
compulsory  labor  statistics,  in  welfare  work,  etc."24 

Respecting  the  working  of  the  Austrian  councils,  Dr.  Hoff- 
man Ostenhof25  says  that  the  "fears  of  this  institution  expressed 
by  some  are  unfounded;"  they  are  developing  into  a  "useful 
medium  between  employer  and  employee."26 

D.  FURTHER  DEVELOPMENTS  IN  EUROPE 

At  the  ninth  Trade  Union  Congress  held  in  Christiania,  Nor- 
way, July,  1920,  a  resolution  was  passed  favoring  the  creation  of 

*40stenhof,  Hoffman,  "Social  Policy  in  the  Republic  of  Austria,"  supplement 
to  the  Annals  of  the  American  Academy  of  Political  and  Social  Science,  Novem- 
ber, 1921,  p.  56. 

"Ibid.,  p.  58. 

•7*11, 


439]  THE  COUNCIL   MOVEMENT   IN   FOREIGN  COUNTRIES  35 

works  councils  as  a  means  whereby  the  workers  should  be  pre- 
pared, through  greater  knowledge  of  the  management  of  industry, 
to  make  the  socialization  of  all  industries  a  success. 

The  Norwegian  trade  unions  are  dominated  by  the  Socialists,  as 
is  also  the  Norwegian  Labor  Party.  These  groups  are  professedly 
engaged  in  a  fight  for  a  new  social  order  in  which  the  working 
classes  will  gain  political  and  economic  control.  In  response  to 
the  pressure  brought  by  the  workers,  a  Works  Council  Law  was 
enacted  in  Norway,  July  22,  1920. 27 

All  public  and  private  concerns  employing  over  fifty  workers 
are  included  in  the  scope  of  the  law,  "provided  such  concerns 
(i)  come  under  the  law  of  September  18,  1915,  as  to  the  protec- 
tion of  industrial  workpeople,  or  (2)  have  for  their  object  the 
working  of  railway,  tramway,  telegraph,  or  telephone  services." 
The  King  may  extend  the  law  to  all  concerns. 

Works  councils  of  at  least  two  and  not  over  ten  members  are 
to  be  elected  by  the  workers  over  eighteen  years  of  age  in  each 
works.  Two  years  of  service  and  the  age  of  21  are  the  qualifica- 
tions required  of  members  of  the  councils. 

These  councils  have  only  an  advisory  power.  Before  coming  to 
a  decision  on  certain  matters,  the  employer  must  consult  with  the 
works  council.  These  matters  include  changes  in  management 
which  affect  working  conditions;  scales  of  pay,  hours,  overtime, 
piece-work  rates,  holidays,  and  other  working  conditions,  unless 
agreements  exist  between  the  workpeople  and  employer  respecting 
these  matters;  workshop  regulations  and  additions  or  changes 
therein;  and  setting  up  or  managing  of  welfare  institutions,  such 
as  sick  funds,  and  housing.  The  council  has  the  right  to  act  as 
conciliator  in  any  dispute  between  workpeople  and  the  employer, 
if  they  involve  working  conditions  or  dismissal. 

Works  councils  are  provided  for  in  Czecho-Slovakian  factories 
by  a  law  passed  by  the  Czecho-Slovakian  Senate,  August  12,  1921, 
which  became  effective  January  I,  1922.  It  does  not  apply  to  state 
establishments,  but  to  all  other  establishments  employing  over 
thirty  people.  These  councils  have  functions  similar  to  those  pro- 
vided for  in  the  Norwegian  and  German  laws.  Some  of  their 
special  duties  are:  the  caring  for  the  social,  economic,  and  intel- 

n"Works  Council  in  Norway:  New  Act,"  Labor  Gazette  (London),  August, 
1920,  p.  423. 


36      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [440 

lectual  interests  of  the  workers,  which  includes  the  making  of 
agreements  regarding  hours,  wages,  and  the  enforcement  of  such 
agreements;  the  examining  of  the  pay-rolls  of  the  concern;  the 
enforcement  of  arbitration  decrees  and  labor  laws;  the  assisting 
in  settling  cases  of  large  scale  dismissal  of  employees,  not  due  to 
working  conditions;  the  maintaining  of  good  relations  between 
employers  and  employees  and  among  the  employees;  and  the 
managing  of  philanthropic  utilities  within  the  concern.  In  estab- 
lishments employing  300  or  more  workers,  or  fifty  or  more  clerks, 
the  council  can  demand  to  see  the  company's  accounts.  In  limited 
or  joint  stock  companies  employing  200  or  more  workers, 
the  works  council  is  entitled  to  one  representative  on  the  Board 
of  Directors,  but  such  representative  cannot  vote.  A  strong  de- 
mand for  works  councils  has  developed  in  Italy  in  the  past  few 
years,  and  a  law  providing  for  them  was,  in  February,  1921,  bare- 
ly defeated  in  the  Italian  Chamber  of  Deputies. 


CHAPTER  II 

THE  NON-UNION  COUNCIL  MOVEMENT  IN  THE 
UNITED  STATES 

There  are  over  seven  hundred  industrial  firms  in  the  United 
States  which  have  in  operation  at  the  present  time  some  plan  for 
extending  to  their  employees  a  share  in  the  management  and  con- 
trol of  the  industry.  The  names  given  to  these  plans  are  almost 
as  numerous  as  the  plans.  In  the  course  of  this  discussion,  the 
terms,  "councils,"  "council  movement,"  or  "plans  of  joint  indus- 
trial management,"  are  used  as  convenient  general  expressions  to 
designate  this  whole  group  of  joint  works  councils,  joint  commit- 
tees, works  councils,  shop  committees,  etc.,  which  are  the  sub- 
ject of  this  study.1 

The  essential  feature  which  these  many  plans  have  in  common 
is  that  they  all  extend  to  the  employees,  through  their  elected 
representatives,  a  greater  opportunity  to  exercise  a  share  in  the 
management  of  their  respective  industry.  This  is  accomplished 
either  by  allowing  them  direct  exercise  of  authority  or  greater  op- 
portunity to  present  to  those  having  final  authority,  their  views 
upon  matters  directly  affecting  their  welfare.  The  latter,  as  is 
shown  later,  may  be  as  effective  a  method  of  attaining  a  share  in 
control  as  the  former. 

A.  EARLY  HISTORY  OF  NON-UNION  COUNCIL  PLANS 
IN  THE  UNITED  STATES 

It  has  been  suggested  that  long  before  the  growth  of  any  defi- 
nite plans  for  employee  representation  in  management,  there  were 
many  plants  in  the  United  States  in  which  various  committees  of 

Examples  of  these  names  are:  "Cooperative  Association,"  "Employees' 
Representation  Plan,"  "Conference  Plan,"  "Employees'  Cooperative  Plan,"  "Joint 
Conference  Committee,"  "Mutual  Aid  Society,"  "Industrial  Partnership  Plan," 
"Industrial  Representation  Committee  Plan,"  "Representative  Industrial  Con- 
gress," "Plan  of  Industrial  Democracy,"  "Cooperative  Welfare  Association,"  "Plan 
of  Shop  Control  by  Joint  Representation,"  "Industrial  Council  Plan,"  "Plant 
Committee  Plan,"  "Shop  Committee  Plan,"  "Plan  of  Industrial  Relations,"  "Co- 
operative Management,"  "Democratic  Industrial  Government,"  "Industrial  Con- 
stitution," "Employees'  Conference  Committee,"  "Partnership  Plan,"  "Joint  Rep- 
resentation of  Employees  and  Management." 

37 


38      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [442 

the  workers  were  administering  different  welfare  and  benefit  asso- 
ciation activities.  That  such  committees  have  existed,  and  do 
exist,  is  perhaps  true;  but  that  the  definite  plans  for  industrial 
councils,  herein  studied,  were  in  any  way  an  outgrowth  of  the  ex- 
perience with  such  welfare  committees  seems  to  be  improbable. 

In  the  course  of  this  study  a  questionnaire  was  sent  out  in 
which  the  following  questions  were  asked:  "Did  you  have  any 
committee  of  your  workers  sharing  in  any  way  in  the  control  or 
administration  of  any  activities  in  your  industry  prior  to  the 
adoption  of  your  present  plan  of  employee  representation?  If  so, 
can  your  present  plan  be  said  to  be  in  any  respect  a  result  of  your 
experience  with  such  committees?"  Replies  were  received  from 
sixty-three  companies.  All  but  the  Filene  Co.  of  Boston  answered 
the  latter  question  in  the  negative.  Only  three  reported  having 
had  any  workers'  committees  previous  to  their  present  plan.  If 
these  answers  may  be  considered  to  any  degree  indicative  of  the 
situation  as  a  whole,  it  may  be  concluded  that  the  movement  to- 
ward the  adoption  of  council  plans  in  the  United  States  has  been, 
on  the  whole,  an  abrupt  change  in  the  labor  policies  of  the  firms 
involved. 

One  example  of  a  gradually  evolved  non-union  joint  council 
plan  in  the  United  States  is  that  of  the  Filene  and  Co.  depart- 
ment store  in  Boston,  Mass.,  a  large  retail  store  with  about  3,000 
employees.  This  plan  is  also  probably  the  earliest  example  of  a 
successful  non-union  council  plan  in  the  United  States.  It  began 
in  1898  with  a  committee  of  employees  which  assisted  in  the  ad- 
ministration of  an  insurance  plan  and  a  medical  clinic.  New  com- 
mittees were  created  to  carry  on  other  activities  after  the  success 
of  this  first  one  was  observed.  Education,  library,  health,  and 
suggestion  committees  were  added  in  1899.  An  entertainment 
committee  was  added  in  1900,  and  a  clubhouse  committee  in  1901. 
Up  to  this  point  the  employees  were  sharing  only  in  what  is  com- 
monly referred  to  as  welfare  work.  However,  in  1901,  an  im-' 
portant  step  was  taken  by  the  formation  of  the  arbitration  board. 
Still  later,  committees  were  formed  to  handle  special  subjects,  as 
the  one  created  in  1902  for  publicity,  and  in  1903  for  athletics. 
In  1905,  another  larger  step  in  the  direction  of  democratic  indus- 
trial management  was  taken  by  the  formation  of  the  Filene 
Cooperative  Association  Council,  which  was  a  legislative  body.  In 


443  ]       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  39 

1906,  a  music  committee  was  formed,  and  in  1912,  a  committee  on 
cooperative  supply.  Finally  in  1920,  the  Filene  cooperative  asso- 
ciation benefit  society  came  into  existence. 

This  sketch  of  the  development  of  the  Filene  cooperative  asso- 
ciation shows  that  it  has  gone  through  a  gradual  evolution.  As 
the  need  or  advantage  of  new  extensions  of  power  to  the  em- 
ployees was  seen,  and  the  ability  of  the  employees  to  shoulder 
such  new  responsibilities  was  demonstrated,  the  extensions  were 
made  and  the  new  responsibilities  given.  Because  it  is  probably 
the  oldest  and  at  the  same  time  one  of  the  most  thoroughly  dem- 
ocratic and  most  successful  of  non-union  plans  for  joint  indus- 
trial management  in  America,  the  Filene  plan  is  here  described 
at  length. 

All  employees,  including  salaried  officials,  by  virtue  of  being 
employed  in  the  store,  are  members  of  the  Filene  cooperative 
association,  hereafter  designated  as  the  F.  C.  A.  The  F.  C.  A. 
is  a  "self-governing  body  operating  under  a  charter,  constitu- 
tion, and  by-laws."  It  elects  its  own  officers  by  popular  vote,  and 
has  an  executive  secretary  who  gives  his  entire  time  to  directing 
the  work  of  the  association.  He  is  chosen  by,  and  is  responsible 
to,  the  F.  C.  A.,  but  is  paid  by  the  company. 

The  F.  C.  A.  arbitration  board  is  composed  of  twelve  mem- 
bers, elected  by  and  from  the  employees,  with  one  from  each  sec- 
tion of  the  store.  Any  matter  upon  which  an  employee  is  dis- 
satisfied may  be  appealed  by  him  to  this  board.  This  matter 
may  be  a  dispute  between  an  employee  and  the  company;  be- 
tween two  employees;  or  between  an  employee  and  the  F.  C.  A. 
In  settling  all  matters  brought  before  this  board,  a  majority  vote 
is  final.  It  is  given  specific  jurisdiction  in  cases  of  discharge, 
wage  reductions,  transfers,  promotion,  wages,  missing  sales, 
shortages,  lost  packages,  breakages,  vacation  wages,  insurance 
payments,  judgments  of  the  suggestion  committee,  and  disputes 
between  employers.  Disputes  between  an  executive  of  the  F.  C. 
A.  and  the  company  may,  if  desired,  be  sent  to  a  special  arbitra- 
tion committee  of  three,  one  being  chosen  by  the  F.  C.  A.;  one 
by  the  company;  and  one  by  these  two. 

The  F.  C.  A.  may  "initiate  new  store  rules  or  modifications  or 
cancellations  of  existing  store  rules  concerning  store  discipline, 
working  conditions,  or  relations,  or  any  other  matter,  excepting 


40      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [444 

policies  of  the  business,  by  a  two-thirds  vote  of  the  entire  mem- 
bership." The  management  has  the  power  of  veto.  The  measure 
can  then  be  passed  only  by  a  two-thirds  vote  of  the  entire  mem- 
bership of  the  F.  C.  A.  after  at  least  one  mass  meeting  has  been 
held  for  discussing  this  measure. 

The  F.  C.  A.  council  is  composed  of  twenty-three  members. 
This  council  functions  as  the  legislative  organ  of  the  association. 
Twelve  of  its  members  are  elected;  the  other  eleven  are  the  four 
officers  of  the  F.  C.  A.,  the  four  employee  members  of  the  Board 
of  Directors,  and  the  presidents  of  the  Men's  Club,  Women's  Club, 
and  Girl's  Club.  This  council  may  perform  the  same  duties 
designated  above  for  the  F.  C.  A.  as  a  whole,  with  the  excep- 
tion that  it  can  pass  a  measure  only  by  five-sixths  vote  and  any 
measure  must  be  referred  to  a  referendum  vote  of  the  entire  asso- 
ciation if  4%  of  the  members  petition  for  such  a  referendum. 

There  are  eleven  members  on  the  Board  of  Directors.  The 
employees  nominate  six  members  for  this  board,  and  the  stock- 
holders of  the  company  choose  four  from  this  panel  of  six.  These 
four  employee  members  have  the  same  powers  as  the  ones  repre- 
senting the  employers. 

Certain  significant  facts  may  be  noted  in  this  plan.  Although 
the  officers  of  the  company  are  members  of  the  F.  C.  A.;  can  vote; 
and  can  hold  office,  they  are  in  any  section  numerically  weak. 
They  have  no  assurance,  therefore,  of  any  representation  on  the 
council  or  the  arbitration  board.  Moreover,  any  matter,  "ex- 
cepting business  policies,"  may  be  the  subject  of  ruling  which 
can  be  passed  over  the  management's  veto  by  a  two-thirds  vote  of 
the  F.  C.  A. 

Another  early  example  of  a  non-union  council  plan  was  that 
founded  in  1904  by  the  Nernst  Lamp  Company  of  Pittsburg. 
This  plan  created  a  "factory  committee"  on  which  the  clerical 
force,  the  workers,  the  foremen,  and  the  management  were  rep- 
resented. It  has  long  since  been  adandoned.2 

A  third  instance  of  a  plan  for  joint  industrial  control  was  that 
instituted  in  1907  by  the  Nelson  Valve  Co.  of  Philadelphia.  This 
plan  had  two  bodies  which  were  similar  to  the  "Senate"  and  the 
"House  of  Representatives"  of  the  Leitch  plans  to  be  described 

''Works  Councils  in  the  United  States,"  published  by  the  National  Indus- 
trial Conference  Board,  Research  Report,  No.  21,  October,  1919,  p.  5. 


445]       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  4! 

later.  In  this  case  they  were  called  the  "Upper  House,"  and  the 
"Lower  House."  The  "Upper  House"  was  composed  of  foremen, 
and  the  "Lower  House"  of  representatives,  elected  by  the  men 
in  each  shop.  This  plan  has  also  been  abandoned.3 

In  1911,  the  Philadelphia  Rapid  Transit  Co.,  which  was  at  that 
time  on  the  verge  of  bankruptcy,  passed  over  to  a  new  manage- 
ment. The  new  management  organized  what  was  called  "The  Co- 
operative Welfare  Association"  among  the  10,000  employees  of 
the  company,  as  a  definite  effort  to  gain  their  cooperation,  which 
it  considered  to  be  the  first  and  most  important  step  toward  suc- 
cess. 

In  1912,  the  Milwaukee  Electric  Railway  followed  the  example 
of  the  Philadelphia  Rapid  Transit  Co.  and  organized  what  they 
called  an  "Employees'  Mutual  Benefit  Association"  which  was 
similar  to  the  Philadelphia  plan. 

In  1913,  a  new  factor  appeared,  destined  to  play  an  important 
role  in  the  future  of  the  movement  toward  joint  industrial  man- 
agement in  the  United  States.  This  new  factor  was  the  advent 
of  an  "industrial  evangelist,"  preaching  a  doctrine  of  industrial 
democracy.  Since  1913,  John  Leitch  has  installed  many  plans 
of  joint  industrial  management,  and  many  of  them  have  been 
very  successful.  Because  of  the  important  role  played  by  Mr. 
Leitch  in  the  furthering  of  the  movement  toward  joint  industrial 
control,  and  because  the  Packard  Piano  Co.  plan  is  one  of  the 
most  successful  of  the  Leitch  plans,  and  is  fairly  typical  of  all 
that  he  has  installed,  it  is  here  described  at  length.  The  story  of 
the  adoption  of  the  Packard  Piano  Co.  plan  is  typical  of  what 
has  taken  place  in  a  score  or  more  of  other  plants  where  Mr. 
Leitch  has  installed  similar  plans. 

Late  in  the  year  1912,  the  Packard  Piano  Co.  had  serious 
labor  troubles,  leaving  the  plant  heavily  burdened  with  a  load 
of  ill  will,  suspicion,  and  mistrust  on  the  part  of  its  working  force. 
The  efficiency  of  the  plant  was  very  low.  The  management 
called  in  Mr.  Leitch  to  establish  its  industrial  relations  policy 
upon  a  sound  basis  and  gain  the  good  will  and  cooperation  of  the 
men.  Leitch  studied  the  plant  and  conditions;  became  acquainted 
with  the  men;  held  several  mass  meetings;  and  proposed  his  plan 
of  joint  industrial  management,  which  the  men  voted  to  adopt. 

•Ibid. 


42      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [446 

He  proposed  that  the  plan  be  based  upon  the  four  corner  stones: 
Cooperation,  Justice,  Economy,  and  Energy,  and  that  the  cap- 
stone be  Service.  These  are  the  principles  to  which  this  "indus- 
trial evangelist"  always  strives  to  convert  the  management  and 
men  before  he  installs  his  plan  of  industrial  democracy.  The 
plan  which  he  installed  in  the  Packard  Piano  Co.  is  as  follows: 

There  are  a  House  of  Representatives,  elected  from  and  by 
the  workers;  a  Senate,  elected  from  and  by  the  foremen;  and  a 
Cabinet,  composed  of  the  officials  of  the  company.  Certain 
qualifications  as  to  age,  citizenship,  length  of  service  with  the 
company,  etc.  are  required  of  the  voter,  and  higher  qualifications 
of  the  same  nature  of  the  one  holding  office  as  a  representative  or 
Senator.  Either  House  can  initiate  measures,  there  being  no  lim- 
itation to  the  matters  with  which  they  can  deal.  In  order  to  be- 
come a  law,  a  measure  must  pass  both  Houses  and  be  approved 
by  the  Cabinet.  This  power  of  veto  on  the  part  of  the  manage- 
ment has  seldom,  if  ever,  been  used  in  the  many  Leitch  plans  in 
operation,  and  has,  therefore,  not  been  as  significant  a  factor  as 
might  be  assumed.  Under  the  operation  of  this  plan,  coopera- 
tion, good  will,  and  a  resulting  tremendous  gain  in  efficiency  are 
reported  in  extravagant  terms  by  the  Packard  Piano  Co.  offi- 
cials. 

It  is  not  intended  to  imply  here  that  all  the  plans  known  as 
the  Leitch  plans  are  in  every  detail  like  the  one  described  above. 
In  some  plans  there  is  no  Senate;  in  others,  the  Senators  are 
elected  from  the  men.  In  some  plants  joint  committees  from  the 
House,  Senate,  and  Cabinet,  or  House  and  Cabinet,  do  much  of 
the  important  business.  Each  plan  has  always  been  adapted  to 
the  needs  of  the  particular  plant. 

In  1914,  four  plans  of  joint  industrial  management  were 
adopted:  one  by  the  Geometric  Tool  Co.  of  New  Haven,  Conn.; 
one  by  the  Pilgrim  Laundry  Co.  in  Brooklyn,  N.  Y.;  one  by  the 
White  Motor  Co.  of  Cleveland;  and  another  by  the  Printz-Bied- 
erman  Co. 

In  1915,  the  Colorado  Fuel  and  Iron  Co.  adopted  a  plan  as  a 
result  of  the  disastrous  strike  of  1915.  Following  the  strike,  the 
Rockefeller  Foundation  was  requested  to  make  a  study  of  in- 
dustrial relations  and  work  out  a  plan  for  establishing  these  rela- 
tions upon  a  sound  basis.  A  plan  for  joint  industrial  manage- 


44?]       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  43 

ment  was  worked  out  and  in  October,  1915,  was  adopted  in 
mines  located  in  Colorado  and  Wyoming.  These  mines  em- 
ployed about  14,000  workers.  The  plan  was  also  adopted  in  the 
company's  steel  works  in  Colorado. 

Other  plans  adopted  in  1915  were  those  of  the  Joseph  Feiss  Co. 
of  Cleveland,  the  Plimpton  Press,  and  the  Nunn,  Bush,  and  Wei- 
don  Shoe  Co. 

In  1916  and  1917,  according  to  records  at  hand,  there  were  at 
least  four  council  plans  adopted.  These  were  the  plans  adopted 
by  the  Harris  Engineering  Co.  of  Bridgeport,  Conn.  (1916)  and 
the  Davis  Coal  and  Coke  Co.  of  Cumberland,  Md.  (1916),  and 
the  Leitch  plans  installed  in  the  William  Demuth  and  Co.'s  plant 
in  New  York  (1917)  and  the  Sidney  Blumenthal  and  Co.'s  plant 
in  Shelton,  Conn.  (1917). 

B.   THE  PERIOD  OF  RAPID  EXPANSION 

The  growth  of  non-union  joint  council  plans  was  very  slow  up 
to  the  end  of  1917.  The  year  1918  marks  the  beginning  of  a 
period  of  rapid  expansion  in  this  movement,  which  rapid  growth 
has  continued  up  to  the  present  time. 

1.  Rapid  Increase   of    Voluntary   Plans.    To   the   year    1918, 
all  plans  had  been  voluntarily  adopted  by  employers  as  a  possible 
solution  to  the  problem  of  gaining  improved  industrial  relations. 
Many  of  the  plans  formed  in  1918  and  1919  were  also  adopted 
voluntarily  by  employers   as  a  means    of    settling    their    labor 
troubles.    The  rapid  increase  in  the  number  of  these  voluntarily 
adopted  plans  seems  to  have  been  due  very  largely    to    three 
causes.     In  the  first  place,  labor  problems  were  becoming  more 
and  more  acute  all  through  the  country.     Industrial  unrest  was 
at  its  height,  and  the  number  of  strikes  was  increasing  rapidly. 
Labor  turnover  was  a  serious  problem  to  many  concerns.     Em- 
ployers were  grasping  at  any  possible  solution  to  these  problems. 
A  second  influence  was  the  widely  advertised  success  of  a  number 
of  the  joint  council  plans  already  in  existence.    The  third  cause 
was  the  activity  of  certain  government  boards  which  had  helped 
to  advertise  and  recommend  the  idea  of  joint  industrial  manage- 
ment. 

2.  Work  of  the  National  War  Labor  Board.    In  the  spring  of 
1918,  when  the  problem  of  labor  unrest  had  grown  quite  acute 
and  there  was  much  inefficiency  because  of  strikes  and  high  labor 


44      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [448 

turnover,  the  President  of  the  United  States  created  the  National 
War  Labor  Board.  This  Board  was  to  "act  as  a  court  of  last 
resort  in  industrial  disputes  in  which  war  production  was  threat- 
ened." The  creation  of  this  Board  and  its  activities  are,  there- 
fore, properly  regarded  as  the  result  of  the  desire  to  gain  the 
cooperation  of  labor  to  the  end  of  more  efficient  production  and 
more  effective  prosecution  of  the  war. 

This  Board  early  adopted  the  policy  of  furthering  the  forma- 
tion of  joint  committees,  composed  of  representatives  from  the 
management  and  representatives  elected  by  the  men,  in  the  var- 
ious establishments  coming  under  their  jurisdiction.  In  accord 
with  this  policy,  many  awards  requiring  such  committees  were 
handed  down.  The  following  excerpts  are  typical  of  the  provi- 
sions made  in  the  National  War  Labor  Board's  awards  for  the  for- 
mation of  joint  committees : 

"The  election  by  the  workers  of  their  representative  depart- 
ment committees  to  present  grievances  and  mediate  with  the 
Company  shall  be  held,  during  the  life  of  this  award,  in  some 
convenient  public  building  in  the  neighborhood  of  the  plant,  to 
be  selected  by  the  Examiner  of  this  Board  assigned  to  supervise 
the  execution  of  this  award,  or,  in  case  of  his  absence,  by  some 
impartial  person,  a  resident  of  Pittsfield,  to  be  selected  by  such 
Examiner. 

"The  duties  of  the  department  committees  shall  be  confined  to 
the  adjustment  of  disputes  which  the  shop  foremen  and  the  divi- 
sion superintendents  and  the  employees  have  been  unable  to 
adjust. 

"The  department  committee  shall  meet  annually  and  shall 
select  from  among  its  number  three  employees  who  shall  be 
known  as  the  committee  on  appeals.  This  committee  shall  meet 
with  the  management  for  the  purpose  of  adjusting  disputes 
which  the  department  committees  have  failed  to  adjust. 

"It  is  understood  by  employer  and  employees  that  a  dispute 
involving  one  or  two  persons  shall  be  first  taken  up  by  the 
individuals  with  their  foremen.  Disputes  involving  more  than  two 
persons  may  be  taken  up  first  with  the  foremen,  or  by  the  depart- 
ment committee,  as  the  persons  interested  may  elect."4 

*National  War  Labor  Board  Award  and  Rulings,  in  reference  to  the  General 
Electric  Company,  Pittsfield  Works,  pp.  10-11. 


4493       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  45 

These  passages  show  that  the  National  War  Labor  Board 
awards  provided  only  in  a  general  way  for  the  creation  of  joint 
committees.  A  member  or  representative  of  the  Board  was  gen- 
erally sent  to  assist  in  the  study  of  the  local  conditions,  and  in 
forming  a  plan  adapted  to  local  needs. 

The  first  award  of  the  National  War  Labor  Board  providing 
for  the  creation  of  committees  was  in  the  case  of  the  General 
Electric  Company's  Lynn  Works.  That  award  provided: 

1.  For  the  election  of  department  committees  by  all  workers 
in  a  department;  each  department  committee  to  meet  with  rep- 
resentatives of  the  management  to  settle  disputes. 

2.  That  these  department  committees  meet  and  choose  a  com- 
mittee of  three  to  meet  with  the  management  as  a    joint    com- 
mittee on  appeals. 

3.  That  the  duties  of  these  committees  be  "confined  to  the  ad- 
justment of  disputes." 

This  general  award  was  carried  into  effect  under  the  super- 
vision, and  with  the  assistance,  of  a  representative  of  the  War 
Labor  Board.  The  plan,  as  worked  out  to  fit  the  local  needs  in 
this  case,  has  the  following  main  provisions: 

1.  Each  plant  is  divided  into  "sections."     Each  section  con- 
tains 200  workers. 

2.  Each  section  elects  semi-annually  two  representatives. 

3.  All  employees  in  service  three  months  or  over  can  vote. 

4.  Any  employee,  who  is  an  American  citizen  over  18  years  of 
age  able  to  read  and  write  the  English  language,  and  who  has 
had  at  least  one  year  of  service  with  the  company,  is  eligible  to 
hold  office  as  a  representative. 

5.  These  two  representatives  constitute  a  "Committee  on  Fair 
Dealing." 

6.  The  "Sections"  are  grouped  into  "shops."    The  representa- 
tives, elected  by  the  sections  in  a  shop,  meet  and  elect   three   of 
their  members  to  a  joint  shop  committee  on  which  there  are  three 
members  of  the  management. 

7.  All  the  elected  representatives  in  the  concern  choose  four 
workers  to  serve  on  a  general  joint  committee  on  which  there  are 
also  four  representatives  of  the  management. 

8.  Several  general  joint  special  committees  are  created  to  deal 
with  special  matters. 


46      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [450 

• 

9.  All  matters  which  the  workers  or  management  desire  adjust- 
ed are  considered  by  these  committees.  The  joint  shop  com- 
mittee can  settle  a  matter  if  its  decision  is  satisfactory  to  all  con- 
cerned. If  not,  the  matter  can  be  appealed  to  the  general  joint 
committee  and  there  settled  by  a  decision  satisfactory  to  all  con- 
cerned, or  by  a  unanimous  vote  which  is  final.  If  the  general 
joint  committee  fails  to  settle  any  matter,  it  is  referred  to  the 
management  for  consideration. 

During  the  years  1918  and  1919,  plans  for  joint  committees 
were  adopted  under  the  supervision  of  the  National  War  Labor 
Board  by  approximately  one  hundred  firms. 

3.  Work  of  the  Shipbuilding  Labor  Adjustment  Board.  Some- 
what similar  to  the  work  of  the  National  War  Labor  Board  was 
the  work  of  the  Shipbuilding  Labor  Adjustment  Board,  which 
was  organized  in  1917  as  a  means  to  gain  a  "fair  and  honest  ad- 
justment of  individual  and  group  interests  in  such  a  way  as  to 
secure  from  labor  the  heartiest  cooperation  in  meeting  the  emer- 
gency, and  willing  effort  to  bring  about  maximum  output  of 
ships." 

This  Board  was  composed  of  three  members:  a  representative 
of  the  Emergency  Fleet  Corporation,  a  representative  of  the 
public,  and  a  representative  of  organized  labor.  It  was  approved 
at  a  meeting  at  which  nearly  all  of  the  unions  involved  in  ship- 
building were  present.  It  was  given  final  authority  to  adjust  in- 
dustrial relations  between  employers  and  employees  engaged  in 
"construction  or  repair  of  shipbuilding  plants  or  of  ships  or  ship- 
yards under  the  United  States  Shipping  Board,  Emergency  Fleet 
Corporation,  or  with  said  Board."  In  practice  it  was  called  to 
adjust  matters  for  many  private  concerns  doing  government 
work.5 

In  many  of  the  shipyards,  shop  committees  of  various  types 
were  found  by  this  Board  to  be  already  in  existence.  However, 
in  some  yards  the  Board  found  much  objection  to  the  creating 
of  shop  committees.  "Partly  because  of  these  objections,  pro- 
visions for  committees  were  omitted  from  some  of  the  early 
awards.  Therefore,  at  the  time  of  the  October,  1918,  awards, 

"'History  of  the  Shipbuilding  Labor  Adjustment  Board,"  Bulletin  of  the 
U.  S.  Bureau  of  Labor  Statistics,  No.  283,  p.  8. 


45  I  ]       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  47 

shop  committees  were  functioning  with  varying  degrees  of  suc- 
cess in  some  of  the  districts,  whereas  in  other  districts  there  were 
no  committees  at  all. 

"The  peculiar  circumstances  created  by  the  war re- 
sulted in  practically  complete  organization  of  shipyard  workers. 
In  the  absence  of  shop  committees  complaints  came  to  be  handled 
through  local  officers  of  the  union,  and  a  situation  developed  in 
yards  where  there  had  been  no  committees  in  which  employers 
were  anxious  for  committees,  and  union  representatives  were  re- 
luctant to  have  them  introduced. 

"As  above  noted,  the  October,  1918,  award  for  the  Atlantic, 
Gulf,  and  Great  Lakes  territories  contained  a  blanket  provision 
for  shop  committees  in  all  yards.  The  award  provided  for  the 
election  by  secret  ballot  of  committees  made  up  of  three  members 
for  each  of  the  different  shipyard  crafts  with  a  further  provision 
that  the  chairmen  of  the  craft  committees  should  constitute  a 
joint  shop  committee.  The  October  award  was  effective  in  intro- 
ducing the  shop  committee  system  into  practically  the  whole 
shipyard  industry."6 

The  essential  provisions  of  this  October  award  may  be  sum- 
marized as  follows:7 

i. -Employees  of  each  craft  or  calling  in  any  shop  or  yard  to 
elect  a  committee  of  three  from  their  own  numbers. 

2.  Committee  members  to  be  elected  by  secret  ballot;  to  hold 
office  for  six  months;  and  to  be  eligible  for  re-election. 

3.  The  chairman  of  each  of  these  craft  shop  committees  to  be 
members  of  a  joint  shop  committee. 

4.  The  joint  shop  committee  to  elect  five  of  its  members  to 
form  an  executive  committee  to  negotiate  with  the  representatives 
of  the  management. 

5.  Grievances  to  go  first  to  the  craft  shop  committee  and  the 
foreman.    Failing  of  an  adjustment,  then  to  the  shop  committee 
and  the  superintendent.    If  the   matter  still   remains  unsettled, 
the  executive  committee  of  the  joint  shop  committee  can  take 
it  up  with  the  superintendent  or  the  high  officials  of  the  company 
in  joint  conference. 

'Ibid.,  p.  63. 

Wolfe,  A.  B.,  Works  Committees  and  Joint  Industrial  Councils,  pp.  117,  118. 


48      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [452 

6.  Disputes  which  cannot  be  settled  by  these  methods,  to  be 
submitted  for  arbitration  by  the  district  examiner. 

These  committees  at  first  met  much  opposition  in  some  yards 
where  the  customary  procedure  was  to  settle  all  matters  needing 
adjustment  through  the  union  officials.  But  "unionization  in  the 
great  majority  of  the  yards  progressed  so  rapidly  that  at  an  early 
date  the  committees  came  to  be  made  up  almost  exclusively  of 
union  men."8  Many  of  the  committees  created  by  this  Board 
thus  became  union,  rather  than  non-union  committees.  However, 
the  basis  for  election  was  not  union  membership;  any  employees 
were  eligible.  Therefore  in  cases  where  the  men  were  not  all  or- 
ganized, the  committees  were  non-union  in  the  sense  in  which 
that  term  is  here  used. 

The  scope  and  functions  of  these  committees  were  completely 
limited  because  of  the  detailed  specifications  contained  in  the 
Board's  awards  respecting  wages,  hours,  conditions  of  work,  etc. 
Nevertheless,  the  multiplicity  of  complex  problems  arising  from 
the  abnormal  war  situation  "gave  these  committees  nearly  as 
great  opportunity  for  constructive  work  as  they  would  be  likely 
to  obtain  in  general  industry  under  normal  conditions."9 

C.  THE  CONTINUED  GROWTH  OF  THE  COUNCIL  MOVEMENT 

The  main  developments  in  the  movement  toward  non-union 
committee  plans  have  now  been  traced  to  the  year  1920.  Three 
outstanding  characteristics  of  the  movement  during  this  early 
period  may  be  noted: 

1.  It  had  been  a  movement  fostered  almost  entirely  by  em- 
ployers and  the  government  as  a  means  to  gain  industrial  peace, 
the  good  will  and  cooperation  of  labor,  and  increased  efficiency. 

2.  These  measures  were  taken  in  the  face  of  abnormal  emer- 
gency conditions,  in  a  period  when  the  laborer  had    the    upper 
hand,   and  the  employer  was  anxious  to    conciliate    differences 
with  him;  and  also  in  a  period  when  there  was  much  industrial 
unrest  and  resulting  inefficiency. 

3.  The  desire  to  check  the  rapid  spread  of  unionism  was  also 
an  important  factor. 

The  question  oftentimes  raised  in  the  last  three  years  has  been 
whether  or  not  the  council  movement  would  die  out  in  the  face 

"'History  of  the  Shipbuilding  Labor  Adjustment  Board,"  Bulletin  of  the 
U.  S.  Bureau  of  Labor  Statistics,  No.  283,  p.  66. 
•Ibid.,  pp.  65,  66. 


453  ]      NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  49 

of  new  conditions  which  have  developed  since  the  war.  Many 
have  prophesied  that  when  the  employer  gained  the  upper  hand 
he  would  no  longer  offer  to  labor  any  representation  upon 
councils  and  committees  to  share  in  the  control  of  industrial  re- 
lations, but  would  eagerly  hurry  back  to  pre-war  autocratic  in- 
dustrial management. 

This  opinion  implied  two  things:  first,  that  employers  already 
having  council  plans  would  abandon  them;  and  second,  that  new 
ones  would  not  spring  up.  Neither  of  these  assumptions  has 
proved  true.  A  number  of  council  plans  have  been  abandoned,  it 
is  true.  Many  of  the  awards  of  the  War  Labor  Board  and  the 
Shipbuilding  Labor  Adjustment  Board  were  necessarily  of  a 
temporary  character,  applying  as  they  did  primarily  to  war  indus- 
tries in  which  serious  depression  would  naturally  follow  after  the 
war,  and  being  imposed  as  they  were,  in  many  cases,  on  unwilling 
employers  and  antagonistic  union  laborers.  However,  even  in 
the  case  of  these  plans,  it  seems  that  the  majority  of  them  have 
been  retained.  Letters  sent  out  to  fifty  firms  having  plans  im- 
posed by  government  boards  revealed  that  only  twelve  have  been 
abandoned. 

The  most  significant  fact  remains  to  be  noted.  The  movement, 
instead  of  retrogressing  in  the  period  of  depression  when  em- 
ployers have  again  held  the  upper  hand,  has  gained  momentum. 
It  may  be  safely  stated  that  the  number  of  plans  in  operation 
has  more  than  doubled  since  1919.  The  National  Industrial  Con- 
ference Board,  which  has  followed  the  growth  of  the  movement 
among  its  members,  has  estimated  that  while  in  1919  there  were 
225  plans  in  operation,  there  are  now  at  least  725.10 

Turning  to  the  large  number  of  voluntarily  adopted  plans  cited 
above,  only  an  insignificant  number  of  these  have  been  aban- 
doned. Inquiry  has  been  made  into  the  present  status  of  over 
one  hundred  such  plans.  The  management  in  the  vast  majority 
of  firms  having  these  plans  has  been  found  enthusiastic  in  its 
praise  of  the  council  system. 

It  is  also  significant  to  notice  that  many  of  the  firms  corre- 
sponded with  have  apologized  for  the  cursory  nature  of  their 
replies,  and  have  explained  that  the  inquiries  coming  to  them 

"Experience  with  Works  Councils  in  the  United  States,  research  report,  Na- 
tional Industrial  Conference  Board,  No.  50,  May,  1922,  p.  i. 


50      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [454 

from  all  parts  of  the  United  States  and  foreign  countries  con- 
cerning their  council  plans  have  been  so  numerous  that  they 
cannot  take  the  time  to  answer  them  all  adequately.  A  very 
considerable  number,  probably  fifty  or  more,  have  sent  printed 
pamphlets  which  have  been  prepared  to  meet  this  demand  for 
information. 

There  are  five  major  causes  of  this  recent  rapid  growth  of  the 
non-union  council  movement  in  the  United  States.  In  the  first 
place,  employers  have  found  that  these  plans,  evolved  to  gain  the 
good  will  and  cooperation  of  labor  in  a  period  of  emergency,  are 
a  success.  Since  the  good  will  and  cooperation  of  labor  and  the 
resulting  efficiency  are  equally  desirable  in  peace  or  war,  they 
have  assigned  to  such  plans  a  permanent  place  in  their  system 
of  personnel  management. 

A  second  cause  is  to  be  found  in  the  widespread  advertisement 
of  the  success  of  many  of  the  council  plans  adopted  during  the 
war  and  immediate  pre-war  periods.  A  glance  at  the  bibli- 
ography appended  to  this  study  will  reveal  the  profusion  of 
magazine  articles  on  this  subject  which  have  been  broadcasted 
during  the  last  four  or  five  years.  These  numerous  articles  have 
almost  unanimously  proclaimed  the  virtues  and  great  success  of 
such  plans. 

The  phenomenal  growth  of  the  science  of  personnel  manage- 
ment in  American  industries  in  recent  years  has  been  a  third 
contributing  factor.  The  various  non-union  council  plans  herein 
studied  are  typically  a  part  of  the  firm's  system  of  personnel 
management.  Rapid  advance  has  been  made  in  this  field,  and 
there  has  been  a  resulting  change  in  the  attitude  of  American 
business  men  toward  the  problem  of  the  scientific  application  of 
the  human  factor  in  production.  This  has  resulted  in  a  tremen- 
dous increase  in  the  number  of  firms  having  a  personnel  depart- 
ment with  a  personnel  manager  at  the  head,  and  in  the  number 
of  industrial  engineers  whose  services  are  regularly  obtained  by 
individual  firms.  This  expanding  group  of  personnel  experts  and 
industrial  engineers  has  quite  generally  favored  the  principle  of 
more  democratic  industrial  management  through  the  medium  of 
shop  committees  and  works  councils. 

In  the  fourth  place,  industrial  unrest,  always  the  fundamental 
force  impelling  employers  to  greater  efforts  in  the  direction  of 


455]       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  5! 

scientific  personnel  management,  was  present  oftentimes  in 
threatening  proportions  during  the  post-war  reconstruction 
period. 

Finally,  there  is  no  doubt  concerning  the  fact  that  the  non- 
union council  movement  in  the  United  States  has  been  largely  an 
anti-union  movement.  The  adoption  of  employee  representation 
plans  has  been,  in  many  cases,  a  move  which  has  had  as  its  im- 
mediate purpose  either  the  undermining  of  existing  unionism  in 
the  industry  or  plant,  or  the  avoidance  of  unionism  which  ap- 
peared imminent.11  Moreover,  these  councils  have  generally  been 
a  success  in  accomplishing  this  purpose.  When  this  purpose 
exists  a  period  like  the  present,  in  which  the  employer  has  the 
upper  hand  in  the  labor  situation,  is  the  most  appropriate  time 
for  initiating  council  plans.  The  success  of  certain  large  packing 
concerns  in  breaking  the  strength  of  the  unions  by  the  adoption 
of  a  council  plan  is  a  case  in  point. 

D.  DESCRIPTION  OF  NON-UNION  COUNCIL  PLANS  IN  THE 
UNITED  STATES 

One  outstanding  characteristic  of  American  council  plans 
is  their  lack  of  uniformity.  The  majority  of  these  have  been 
adopted  voluntarily,  and  without  the  influence  of  any  unifying  or 
dominating  force.  The  result  has  been  that  there  are  almost  as 
many  types  of  plans  as  there  are  plans  in  existence.  A  very 
slight  divergence  in  the  wording  of  a  constitution  may  suffice  to 
produce  important  differences  between  two  otherwise  similar 
plans.  As  a  consequence  of  these  facts,  any  attempt  to  group  all 
council  plans  under  a  certain  broad  classification,  such  as  the 
"War  Labor  Board  Type,"  the  "Shipbuilding  Labor  Adjustment 
Board  Type,"  "Company  Unions,"  the  "Governmental  Type,"  or 
the  "Committee  Type,"  is  very  unscientific  and  misleading. 

The  National  War  Labor  Board  merely  suggested  the  general 
outlines  of  plans,  and  left  it  to  the  companies  to  adapt  the  plan 
to  the  local  need.  There  can  hardly  be  found  any  two  of  the  so- 
called  "Governmental  Types"  that  have  all  the  three  bodies: 
House,  Senate,  and  Cabinet;  that  have  these  elected  on  a  similar 
basis;  or  that  provide  for  the  important  work  to  be  carried  on  in 
a  similar  way.  For  example,  a  plan  may  have  both  a  House  and 

"See  Chapter  VI. 


52      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [456 

Senate,  but  also  provide  for  joint  committees  which  perform  all, 
or  most,  of  the  important  work.  The  essential  features  of  such  a 
plan  are  radically  different  from  one  in  which  the  House  and 
Senate  perform  the  important  work,  subject  to  a  veto  of  the 
management. 

Nearly  all  of  the  so-called  "Company  Unions,"  or  "Employee 
Associations"  have  been  so  named  because  there  exists  a  definite 
organization  of  all  the  employees.  However,  very  few  of  these 
provide  for  any  meetings  other  than  those  of  the  elected  councils 
or  committees.  The  result  is,  therefore,  the  same  as  in  other 
plans  which  have  no  definite  general  organization,  but  in  which 
all  employees  vote  for  council  or  committee  members.  Where 
there  does  exist  an  active  organization  of  all  employees,  it  may 
be  a  very  important  feature  of  the  plan,  but  to  indicate  that  all 
plans  having  such  an  organization  are  similar  in  their  most  es- 
sential features  would  be  very  far  from  the  truth. 

Some  of  these  titles  mentioned  do  have  historical  value,  in  that 
they  indicate  the  origin  of  the  plan.  The  so-called  Governmental 
or  Leitch  plan,  the  National  War  Labor  Board  type,  the  Ship- 
building Labor  Adjustment  Board  type,  and  the  Company  Union 
type  (Filene's)  have  been  described  in  the  historical  sketch  above. 

i.  Description  of  Council  Plans  According  to  Form.  At  the 
beginning  of  the  present  chapter  reference  was  made  to  the 
great  variety  of  names  given  to  American  non-union  council 
plans.  It  is  also  true  that  there  exists  a  tremendous  variation  in 
the  use  of  terms  applied  to  the  various  divisions  and  subdivisions. 
The  result  is  that  this  prevailing  terminology  conveys  no  reliable 
information  as  to  the  character  of  the  respective  plan.  It  is 
highly  desirable,  therefore,  that  more  uniformity  in  the  matter  of 
terminology  be  developed. 

In  the  course  of  this  investigation,  a  chart  was  made  of  the 
form  of  organization  of  one  hundred  American  non-union  council 
plans.  From  this  chart  was  derived  the  following  terminology 
which  describes  with  considerable  accuracy  the  most  important 
functioning  representative  bodies  provided  for  in  the  plans  in- 
cluded: 

General  Joint  Council  (representatives  of  workers  and  man- 
agement), comprising  several  works  or  plants  under  one  manage- 
ment. Example:  International  Harvester  Co.'s  21  plants. 


457]      NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  53 

Joint  Works  Council  (representatives  of  workers  and  manage- 
ment), and  a  Works  Council  (representatives  of  workers  only), 
for  an  entire  works  or  plant.  Most  companies  have  but  one  plant. 

Joint  Shop  Committees  (representatives  of  workers  and  man- 
agement), and  Shop  Committees  (representatives  of  workers 
only),  for  a  shop  or  other  minor  division  of  a  works,  such  as  a 
department  or  section. 

Joint  Special  Committees  (representatives  of  workers  and  man- 
agement), and  Special  Committees  (representatives  of  workers 
only),  comprising  committees  created  to  handle  specific  sub- 
jects. 

It  has  been  found  impossible  to  make  any  simplified  classifica- 
tion of  council  plans  which  is  based  upon  this  or  any  other  avail- 
able terminology.  In  fact,  of  the  many  councils  investigated,  hard- 
ly any  two  have  essentially  the  same  type  of  organization.  They 
all  have  some  combination  of  the  forms  of  representative  bodies 
designated  in  the  terminology  outlined  above,  but  only  a  very 
few  have  the  same  combination.  Therefore,  the  following  descrip- 
tion of  council  plans  cannot  be  offered  as  a  classification  in 
which  a  large  number  may  be  included;  it  is  offered  as  an  ac- 
curate description,  stated  in  uniform  terminology,  of  the  form  of 
organization  of  twelve  local  non-union  councils.  From  this  de- 
scription there  may  be  obtained  an  adequate  idea  of  the  general 
character  of  American  non-union  council  plans. 

TYPICAL   PLANS 

International  Harvester  Co. 
Form:    Joint  Works  Council  and  General  Joint  Council 

The  joint  works  council  is  composed  "of  representatives  elected 
by  the  employees,  and  of  representatives  appointed  by  the  man- 
agement." The  latter  must  never  exceed  the  number  of  em- 
ployee representatives.  There  is  one  employee  representative  for 
each  200  employees. 

If  matters  affecting  several  works  arise,  the  president  calls  to- 
gether the  general  joint  council  which  is  composed  of  two  or  more 
representatives  chosen  by  and  from  each  works  council,  and  man- 
agement representatives  appointed  by  the  management.  There  is 
one  employee  representative  for  each  1,000  employees  or  fraction 
thereof.  There  must  never  be  less  than  two  from  each  works. 


54      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [458 

Standard  Oil  Co.  (Indiana) 

Form:    Joint  Works  Council,  General  Joint  Council,  and  Joint 
Special  Committees 

The  joint  works  councils  of  these  typical  plans  are  composed  of 
representatives  elected  by  the  employees,  and  management  rep- 
resentatives appointed  by  the  management.  The  number  of  the 
latter  may  be  equal  to,  but  must  never  exceed,  the  number  of  em- 
ployees' representatives. 

According  to  the  plan  of  the  Standard  Oil  Co.  (Indiana),  each 
plant  is  divided  according  to  departments  and  natural  divisions. 
One  representative  is  allowed  for  each  200  men  in  works  that 
have  in  their  employ  over  2,000  workers.  In  those  having  less 
than  2,000  there  is  one  representative  to  each  150  men. 

The  general  joint  council  is  composed  of  all  employee  repre- 
sentatives of  the  joint  works  councils  of  each  works,  the  chair- 
man of  the  Board  of  Directors,  the  president  and  other  officers 
of  the  company,  as  may  be  directed. 

This  company  provides  that  joint  special  committees  be  formed 
by  the  joint  works  council,  and  be  composed  of  employee  and 
management  representatives,  the  latter  equaling,  but  not  exceed- 
ing, the  number  of  the  former. 

Midvale  Steel  and  Ordnance  Co.,  Cambria  Steel 
Co.,  and  subsidiary  companies 

Form:    Shop  Committees,  Works  Council,  and  General  Joint  Council 

In  this  plan  the  shop  committees  are  composed  of  representa- 
tives elected  by  the  men  in  each  shop.  There  is  one  representa- 
tive to  each  300  men. 

The  works  council  is  composed  of  employee  representatives 
elected  by  and  from  the  members  of  the  shop  committees  on  the 
basis  of  one  representative  for  each  3,000  employees.  Each  works 
council  must  have  at  least  three  members. 

The  members  of  the  general  joint  council  are  the  general  super- 
intendents of  all  the  plants  of  the  company  and  all  members  of 
the  works  council  of  each  plant  of  the  company.  In  this  body, 
one  vote  is  cast  for  the  company  and  one  for  the  employees.  The 
president  of  the  company  and  other  officials  may  meet  with  the 
council  at  any  time. 


459]       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  55 

S.  F.  Bowser  and  Co. 
Form:  Works  Council,  Joint  Works  Council,  and  Joint  Special  Committees 

The  joint  works  councils  of  these  companies  are  composed  of 
representatives  elected  by  employees,  and  of  appointed  manage- 
ment representatives. 

This  plant  is  divided  into  ten  sections,  with  representatives 
elected  from  each  fifty  employees.  The  number  of  management 
representatives  "must  not  be  more  than,  nor  less  than  half  of,  the 
number  of  employee  representatives." 

This  company  has  four  joint  special  committees :  the  joint  com- 
mittee on  rules,  procedure  and  elections,  the  joint  committee  on 
adjustment,  the  joint  committee  on  industrial  conditions,  and  the 
joint  committee  of  final  appeals.  The  two  first  committees  have 
six  members  each.  Three  are  elected  by  the  employee  represent- 
atives and  three  by  the  employer  representatives  of  the  joint 
works  council.  The  joint  committee  on  industrial  conditions  is 
composed  of  ten  members :  five  elected  by  and  from  the  employee 
representatives  of  the  joint  works  council,  and  five  by  and  from 
the  employer  representatives  of  this  council.  The  joint  committee 
of  final  appeals  has  five  members.  Two  are  appointed  by  the 
president  of  the  company;  two  are  elected  from  employees  by  the 
employee  members  of  the  joint  works  council;  and  the  fifth  is  an 
employee  chosen  by  these  four. 

Proctor  and  Gamble  Co. 
Form:   Works  Council,  Joint  Works  Council,  and  Joint  Special  Committees 

The  members  of  the  works  council  are  elected  by  the  employees 
in  the  different  departments  or  sections  of  the  plant.  The  consti- 
tution of  the  Proctor  and  Gamble  Co.  provides  that  the  works 
council  shall  be  elected  on  the  basis  of  one  representative  to  each 
fifty  employees.  In  this  company  an  executive  council  is  formed 
in  order  to  obtain  a  small  governing  body.  It  is  composed  of  the 
chairman  and  vice-president  of  the  works  council  and  five  em- 
ployee representatives  appointed  by  the  chairman. 

The  joint  works  council  is  composed  of  the  employee  members 
of  the  works  council  and  management  representatives  appointed 
by  the  management;  however,  the  number  of  the  management 
representatives  must  not  exceed  one-half  the  number  of  employee 
representatives. 


56      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [460 

The  joint  special  committees  are  composed  of  five  members: 
four  employee  representatives,  and  one  management  representa- 
tive appointed  by  the  chairman  of  the  executive  council. 

Intertype  Corporation 
Form:    Shop  Committees  and  Joint  Works  Council. 

In  this  plan  there  is  one  shop  committee  (department  commit- 
tee) for  each  department,  the  representative  on  the  committee 
being  elected  by  the  employees  of  the  department,  on  the  basis  of 
one  for  each  twenty-five  employees. 

The  joint  works  council  is  composed  of  the  chairmen  of  the 
different  shop  committees;  members  of  the  foremen's  committee, 
which  is  a  committee  of  five  foremen,  elected  by  the  foremen  in 
the  plant;  and  five  management  representatives,  appointed  by 
the  management. 

Westinghouse  Electric  and  Manufacturing  Co. 

Form:    Joint  Shop  Committees,  Joint  Works  Council,  and  Joint 
Executive  Committee. 

The  members  of  the  joint  shop  committees  are  elected  by  em- 
ployees in  the  precincts  into  which  the  departments  are  divided, 
the  number  elected  being  in  proportion  to  the  number  of  employ- 
ees. The  number  of  management  representatives  may  equal,  but 
not  exceed,  the  number  of  employee  representatives. 

The  joint  works  council  (works  joint  conference  committee) 
consists  of  all  the  members  of  the  joint  shop  committees  and  all 
district  committeemen.  The  latter  are  elected  by  and  from  the 
factory  clerks  in  the  various  districts,  on  the  basis  of  one  to  each 
district. 

This  plan  also  provides  for  a  small  joint  governing  body,  called 
the  executive  committee,  composed  of  twelve  employee  represent- 
atives, elected  by  and  from  the  members  of  the  joint  works  coun- 
cil; the  same  or  a  less  number  of  management  representatives, 
appointed  by  the  management;  and  one  factory  clerk,  elected  by 
the  factory  clerk  district  committeemen. 

Bethlehem  Steel  Corporation 

Form:    Works  Council,  Joint  Special  Committees,  and  Special  Committees. 
The  works  council  must  never  have  less  than  ten  members.   Its 
members  are  elected  on  the  following  basis: 


461  ]      NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  57 

No.  of  employees  No.  of 

in  plant  representatives 

Under  1500 One  representative  for  each   100 

1500  to  10,000 One  representative  for  each  200 

Over  10,000 One  representative  for  each  300 

This  company  has  fourteen  special  committees  (employees 
only)  on  the  following  subjects:  rules;  ways  and  means;  safety 
and  prevention  of  accidents;  practice  methods  and  economy;  em- 
ployees' transportation;  wages,  piece  work,  bonus,  and  tonnage 
schedules;  employment  and  working  conditions;  housing,  do- 
mestic economies  and  living  conditions;  health  and  works  sanita- 
tion; education  and  publications;  pensions  and  relief;  athletics 
and  recreation;  continuous  employment;  and  condition  of  indus- 
try. These  committees  are  composed  of  five  members  each,  elect- 
ed by  and  from  the  members  of  the  works  council.  There  is  also 
a  general  committee  composed  of  the  chairman  and  secretary  of 
the  works  council. 

The  joint  special  committees  of  this  plant  are  formed  by  adding 
to  the  special  committees  management  representatives  appointed 
by  the  management,  whose  number  may  equal,  but  not  exceed, 
the  number  of  employee  representatives.  The  joint  general  com- 
mittee acts  as  a  committee  on  appeal. 

Bridgeport  Brass  Co.  and  The  Standard  Brass 
and  Copper  Tube  Co. 

Form:    Joint  Shop  Committees,  Joint  Works  Council,  General 
Joint  Council,  and  Joint  Special  Committees 

In  this  plan,  there  are  two  bodies  which  may  be  appropriately 
called  joint  shop  committees.  These  are  the  division  committees 
and.  group  committees.  Before  an  explanation  of  the  constitu- 
tion of  these  can  be  given,  it  is  necessary  to  explain  the  basis  of 
representation.  The  plant  is  divided  into  departments,  with  one 
representative  elected  for  each  100  employees.  There  must  be  at 
least  one  representative  to  each  department.  The  employee  mem- 
bers of  the  division  committees  are  the  representatives  elected  by 
those  in  the  different  divisions.  An  equal  number  of  employer 
representatives  are  appointed  by  the  management.  The  group 
committees  are  composed  of  all  the  duly  elected  department  em- 
ployees' representatives,  and  an  equal  number  of  appointed  man- 
agement representatives. 


58      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [462 

All  duly  elected  employee  representatives  in  each  works  and  an 
equal  number  of  employer  representatives,  appointed  by  the 
management,  compose  one  of  the  joint  works  councils  of  this 
plant,  the  plant  committee.  The  other  joint  works  council  is  the 
executive  committee,  a  smaller  body  of  ten  members.  Five  of 
these  members  are  elected  by  and  from  employee  representatives 
of  the  joint  works  council,  and  five  appointed  by  the  manage- 
ment. 

Matters  involving  several  works  may  be  discussed  by  the  gen- 
eral joint  council  (general  committee),  consisting  of  all  elected 
employee  representatives  of  each  works  and  an  equal  number 
of  employer  representatives  appointed  by  the  management. 

The  joint  special  committees  are  composed  principally  of  mem- 
bers of  the  joint  works  council.  Some  may  be  employees  who  are 
not  representatives.  In  this  case  they  become  associate  members 
of  the  joint  works  council  and  general  joint  council  with  no  power 
to  vote. 

Elgin  National  Watch  Co. 
Form:    Works  Council  and  Joint  Works  Council 

The  works  council  of  the  Elgin  Watch  Co.  is  composed  of  nine- 
teen employees,  one  elected  from  each  department  in  the  factory. 
The  joint  works  council  is  composed  of  the  members  of  the  works 
council  and  management  representatives. 

The  Remington  Arms  Union  Metallic  Cartridge  Co.,  Inc. 

Form:    Shop  Committees,  Joint  Shop  Committees,  Works  Council, 
and  Joint  Works  Council 

This  plan  is  an  example  of  the  Bridgeport  Employees'  Com- 
mittee plan  which  is  used  by  a  number  of  companies  in  Bridge- 
port, Conn. 

The  plant  is  divided  into  departments.  The  shop  committees 
(employees'  departmental  committees)  are  committees  of  three 
representatives  for  each  department,  elected  by  the  employees  in 
that  department. 

The  joint  shop  committees  are  composed  of  shop  committeemen 
and  employer  representatives  appointed  by  the  management,  the 
number  of  the  latter  being  equal  to,  but  not  exceeding,  the 
number  of  employee  representatives. 

The  governing  bodies,  properly  classified  as  works  councils,  are 
the  employees'  general  committee  and  the  executive  committee. 


463  ]      NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  59 

The  employees'  general  committee  consists  of  the  chairmen  of  all 
the  shop  committees.  The  executive  committee  is  composed  of 
five  members.  For  this  election  the  plant  is  divided  into  five  sec- 
tions, one  executive  councilman  being  elected  by  the  employees' 
general  committeemen  in  each  section. 

The  members  of  the  executive  committee  and  an  equal  number 
of  employer  representatives  compose  the  joint  works  council. 

General  Electric  Co.,  Lynn  Works 
Form:    Joint  Shop  Committees,  and  Joint  Special  Committees 

The  method  of  electing  employee  members  of  the  joint  shop 
committees  differs  somewhat  from  any  method  as  yet  given. 
These  members  are  chosen  by  elected  representatives.  The  works 
is  divided  into  sections  of  about  200  employees.  These  are  then 
grouped  into  shops,  each  shop  being  composed  of  about  three 
sections,  or  600  employees.  Two  employees  are  elected  from  each 
section,  making  six  representatives  to  a  shop.  These  shop  repre- 
sentatives, in  turn,  choose  three  of  their  own  number  to  be  mem- 
bers of  the  shop  committee  to  which  three  employer  representa- 
tives are  appointed  by  the  management. 

This  plan  has  eight  joint  special  committees.  These  are:  com- 
mittees on  routine,  procedure  and  elections;  on  rehabilitation  of 
disabled  soldiers  or  sailors;  on  public  meetings  within  the  plant; 
on  safety;  on  sports;  on  education;  an  advisory  committee  on  the 
works  paper;  and  a  committee  on  adjustments. 

In  addition  to  these  types,  there  is  a  group  of  more  or  less 
similar  plans  which  have  been  oftentimes  classed  as  the  "govern- 
mental type."  The  original  plan  of  this  type  had  a  works  council, 
composed  of  representatives  of  the  men  in  a  whole  works  or  plant, 
called  the  House  of  Representatives;  a  Senate  elected  by  and 
from  the  foremen;  and  a  Cabinet,  composed  of  the  officials  of  the 
company.  Few  plans  of  this  character  exist  now.  Many  of  the 
earlier  ones  have  abolished  the  Cabinet;  some  have  discarded  the 
Senate;  and  others  have  made  both  House  and  Senate  into  works 
councils,  elected  by  the  workers  only,  or  the  workers  and  the 
foremen.  In  many  cases  the  real  work  of  these  plans  is  carried 
on  in  joint  works  councils,  composed  of  representatives  from  the 
House,  Senate,  and  the  Cabinet,  and  in  joint  special  committees 
which  are  similarly  formed. 


60     WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [464 

DESCRIPTION  OF  PROCEDURE,  FUNCTIONS 
AND  AUTHORITY 

The  most  important  feature  of  the  council  plans  are  those  re- 
lating to  procedure,  functions,  and  authority.  For  convenience  in 
dealing  with  these  features,  provisions  for  final  settlement  have 
been  made  the  basis  for  classification.  There  are  four  typical 
methods  of  final  settlement:  settlement  by  arbitration;  settlement 
by  the  manager  or  some  committee  of  officials;  settlement  by  a 
joint  committee;  settlement  by  the  joint  works  council. 

i.  Settlement  by  Arbitration.  Fifty-two  plans  studied  come 
under  this  classification.  Thirty  of  these  have  the  following 
method  of  arbitration:  If  the  highest  representative  body  in  the 
line  of  procedure  can  reach  no  agreement,  whether  by  a  majority 
or  a  unanimous  vote,  the  members  choose  one  arbitrator.  How- 
ever, if  no  decision  can  be  made  concerning  this  arbitrator,  one 
is  chosen  by  the  employee  representatives,  and  one  by  the  presi- 
dent or  management  representatives.  If  these  two  cannot  agree, 
they  choose  the  third  arbitrator.  The  majority  vote  of  these  three 
is  final. 

In  eight  of  the  plans  the  constitutions  provide  no  special 
method  for  arbitration,  saying  only  that  if  the  last  representative 
body  cannot  reach  an  agreement,  the  matter  will  be  given  over 
to  arbitration. 

Twelve  of  the  plans  provide  for  a  definite  outside  body  making 
the  final  decisions  if  the  councils  cannot  agree  or  another  method 
of  arbitration  cannot  be  agreed  upon. 

In  the  International  Harvester  Co.  plan  there  is  no  limitation 
to  the  subjects  that  may  be  taken  up  by  the  joint  works  council 
and  general  joint  council.  All  matters  requiring  adjustment, 
whether  they  be  grievances  brought  up  by  one  employee  or  a 
group  of  employees,  or  matters  taken  up  by  the  joint  works 
council  on  its  own  initiative,  may  be  discussed  and  voted  on  in 
the  joint  works  council.  If  a  majority  vote  of  each  group  of  rep- 
resentatives (employee  and  management)  is  reached,  a  recom- 
mendation is  given  to  the  superintendent  for  carrying  out  the 
ruling.  The  superintendent  may  do  so  or  he  may  refer  it  to  the 
president  who  either  orders  it  carried  out  or  gives  it  over  to  furth- 
er consideration.  However,  if  the  vote  in  the  joint  works  council 
is  a  tie,  the  matter  is  referred  directly  to  the  president,  who  pro- 


465]       NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  6 1 

poses  a  final  settlement  or  refers  it  to  the  general  joint  council. 
But  if  his  decision  is  not  satisfactory  to  the  persons  involved,  he 
refers  it  to  the  general  joint  council.  If  the  president  decides  not 
to  refer  it  to  the  general  joint  council,  or  the  vote  of  that  body 
is  a  tie,  it  is  submitted  to  arbitration. 

In  the  plan  of  the  Colorado  Fuel  and  Iron  Co.,  the  joint  works 
council  and  the  general  joint  council  may  discuss  all  matters  of 
mutual  interest.  Questions  of  welfare  are  especially  dealt  with. 
The  management  of  this  company  has  full  power  to  hire  and  dis- 
charge, and  to  manage  properties,  but  the  fairness  of  methods 
used  in  carrying  out  these  rights  may  be  considered  by  the  repre- 
sentative governing  bodies  of  this  plan. 

In  this  plan  it  is  the  joint  committee  on  cooperation,  concili- 
ation, and  wages  that  has  the  greatest  authority  when  dealing 
with  all  matters  that  may  arise  for  settlement.  The  authority  of 
this  committee  is  even  greater  than  that  of  the  executives.  In 
case  of  a  grievance,  a  settlement  may  be  made  without  an  appeal 
to  the  joint  committee,  for  the  matter  must  go  through  the  fore- 
man and  superintendent  before  being  appealed  to  the  manager, 
general  manager,  and  president  in  the  order  named.  If  a  satisfac- 
tory settlement  is  not  made  by  the  officials,  the  matter  is  taken  up 
by  the  committee  on  cooperation,  conciliation,  and  wages.  The 
decision  of  the  majority  of  this  committee  is  final.  However,  if  no 
decision  is  reached,  with  the  approval  of  the  majority  there  is 
brought  in  an  umpire  whose  decision  as  a  third  party  is  final.  If 
neither  a  majority  vote  of  the  committee  nor  a  decision  on  the 
choice  of  an  umpire  can  be  reached,  it  is  sent  to  arbitration  as 
described,  provided  this  course  is  agreeable  to  the  complainants. 
If  it  is  not  agreeable  to  them,  then  the  case  may  be  investigated 
by  the  State  Industrial  Commission  of  Colorado.  This  last  step 
applies  only  to  those  working  in  the  Colorado  mines. 

In  the  Midvale  Steel  and  Ordnance  Co.  plan,  the  channel  for 
deciding  grievances,  or  matters  initiated  in  the  councils,  is 
through  the  works  council  and  general  joint  council.  If  a  griev- 
ance is  brought  up  by  an  employee  it  is  discussed  first  with  the 
foreman  or  superintendent.  From  him  it  passes  to  the  works 
council.  If  the  works  council  thinks  any  grievance  a  worthy  one, 
it  refers  it  to  the  general  superintendent,  who  meets  with  the  com- 
mittee for  settling  the  matter.  If  the  settlement  suggested  by  the 


62      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [466 

general  superintendent  is  not  acceptable  to  a  majority  of  the  works 
council,  the  matter  is  referred  to  the  general  joint  council  where 
the  employees  and  employers  vote  as  separate  units.  If  this 
council  cannot  agree,  it  is  given  over  to  arbitration. 

In  the  plan  of  the  Nunn,  Bush,  and  Weldon  Shoe  Co.  all 
matters  needing  adjustment  go  to  the  works  council  which  tries 
to  settle  them.  If  the  parties  involved  are  not  satisfied  with  its 
investigation  and  decision,  the  matter  is  sent  to  the  joint  works 
council  which  acts  as  the  governing  and  judicial  body  of  the 
plant.  On  any  question  originating  in  the  works  council  on  which 
the  members  cannot  agree,  the  same  procedure  may  be  followed. 
If  the  joint  works  council  can  reach  an  agreement,  its  decision  is 
final;  if  not,  the  matter  is  sent  to  arbitrators. 

This  council  has  a  peculiar  authority  given  to  it.  After  due  in- 
vestigation it  may  require  the  discharge  of  employees.  Also  no 
employee  can  be  discharged  by  the  management  until  such  order 
has  been  approved  and  sanctioned  by  the  joint  council. 

The  Bethlehem  Steel  Corporation  plan  provides  that  the  special 
committees  and  joint  special  committees  shall  consider  some  of 
the  most  important  questions,  as  wages,  hours,  etc.  The  constitu- 
tion provides  a  channel  for  deciding  any  matter  that  may  arise, 
whether  it  be  a  grievance  by  an  employee,  or  matters  brought  up 
by  the  councils  or  committees.  The  method  of  procedure  is 
through  the  foreman,  superintendent  of  the  department,  manage- 
ment's representative,  and  finally,  to  one  of  the  superior  officers 
of  the  company.  The  last  named  may  try  to  decide  it,  or  if  the 
parties  involved  agree,  he  may  refer  it  to  proper  joint  special 
committees.  If  no  settlement  is  reached,  it  is  sent  to  the  general 
joint  committee  on  appeals.  If  this  committee  cannot  agree,  notice 
of  such  disagreement  is  sent  to  the  president  of  the  company  who 
confers  with  the  committee  concerning  arbitration.  If  he  and  a 
majority  of  this  committee  agree  the  matter  is  given  over  to  arbi- 
trators. 

The  second  type  of  plans  which  have  final  settlement  by  arbi- 
tration, but  in  which  no  definite  method  is  given,  is  illustrated  by 
the  plans  of  the  Dennison  Manufacturing  Co.,  and  the  Dutchess 
Bleachery,  Inc. 

The  general  works  committee,  which  is  the  larger  of  the  two 
works  council  bodies  of  the  Dennison  Manufacturing  Co.,  is 


467]      NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  63 

merely  an  advisory  committee.  It  discusses  factory  problems  and 
regulations  and  makes  recommendations  to  the  management. 
More  authoritative  power  is  given  to  the  central  committee.  It 
may  review  all  grievances  or  cases  of  discharge  sent  to  it  after 
having  been  referred  to  the  foreman,  departmental  representa- 
tives, divisional  representative,  and  division  superintendent. 

If  this  committee  reaches  a  decision,  that  decision  is  final  and 
the  grievance  cannot  be  reopened  except  at  the  request  of  the 
general  works  committee.  If  no  settlement  can  be  made,  the 
matter  is  referred  directly  to  the  management.  If  the  manage- 
ment is  not  able  to  reach  an  agreement,  arrangements  for  arbitra- 
tion are  made.  Group  grievances  arising  in  this  company  are 
brought  up  by  the  appropriate  department  or  divisional  repre- 
sentatives. The  appeal  then  goes  directly  to  the  central  com- 
mittee. 

The  works  council  (board  of  operation)  is  the  first  body  to 
which  any  matter  for  adjustment  may  be  taken.  It  may  confer 
with  the  local  management  concerning  the  matter  to  be  adjusted, 
and  if  no  agreement  is  reached  in  this  way,  the  matter  is  then 
referred  to  the  joint  works  council  (board  of  management).  It 
is  provided  that,  whenever  necessary,  a  case  may  go  to  arbitration. 

The  Philadelphia  Rapid  Transit  Co.,  Intertype  Corporation, 
and  Standard  Oil  Co.  (Indiana)  are  examples  of  the  third  type 
of  settlement  by  arbitration.  In  these  plans  an  outside  body  is 
the  arbitration  board. 

In  the  plan  of  the  Philadelphia  Rapid  Transit  Co.  all  matters 
needing  adjustment  must  first  be  taken  up  in  the  joint  branch 
committee.  Appeal  may  be  made  to  the  respective  joint  depart- 
ment committee,  and  if  the  matter  is  not  settled  there  it  goes  to 
the  general  committee.  If  no  agreement  is  reached  by  this  com- 
mittee, the  matter  is  settled  by  arbitration.  In  any  of  these  com- 
mittees final  settlement  of  any  matter  can  be  made  by  a  majority 
vote  on  each  side. 

There  is  a  special  provision  made  concerning  arbitrators.  If  the 
two  chosen  by  the  general  committee  for  employees  and  the  gen- 
eral committee  for  employers  cannot  agree  on  the  third  party, 
the  Provost  of  the  University  of  Pennsylvania,  the  Chairman  of 
the  Public  Service  Commission,  and  the  President  of  the  Chamber 
of  Commerce  are  asked  to  serve  as  additional  arbitrators. 


64      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [468 

The  shop  committees  of  the  Intertype  Corporation  cooperate 
and  consult  with  the  management  on  matters  directly  affecting 
labor  and  production  in  their  respective  departments.  All  matters 
that  need  adjustment  can  be  brought  up  before  any  shop  com- 
mittee. If  the  members  think  the  case  is  worthy,  they  refer  it  to 
the  works  manager.  If  the  settlement  is  not  satisfactory  to  the 
shop  committee  it  may  take  an  appeal  to  the  joint  works  council. 
If  no  appeal  is  taken,  the  matter  may  be  considered  as  settled.  If 
the  matter  reaches  the  joint  works  council  and  the  council  can- 
not settle  it,  it  is  brought  before  the  president  of  the  corporation. 
If  no  settlement  can  be  reached  there,  the  management  may  offer 
arbitration.  In  case  a  method  of  arbitration  cannot  be  agreed 
upon,  settlement  is  made  by  the  Arbitration  Committee  of  the 
Chamber  of  Commerce  of  the  state  of  New  York. 

The  joint  works  council  and  general  joint  council  of  the  Stand- 
ard Oil  Co.  (Indiana)  are  advisory  bodies.  They  may  discuss  and 
make  recommendations  to  the  management  on  such  questions  as 
wages,  hours,  employment,  works  practice,  living  conditions,  etc. 
All  matters  needing  adjustment  may  be  taken  to  the  joint  works 
council.  If  it  is  a  grievance,  it  must  have  been  discussed  first  with 
the  foreman,  superintendent  of  the  department,  and  assistant 
director  of  industrial  relations.  If  the  joint  works  council  cannot 
agree  on  a  settlement,  the  matter  is  referred  to  the  president  of 
the  company  who,  with  the  employee  representatives  of  the  joint 
works  council,  decides  on  the  best  method  for  arbitration.  If 
they  cannot  agree  on  a  suitable  method,  an  appeal  is  made  to  the 
Secretary  of  Labor  at  Washington. 

2.  Settlement  by  the  Manager  or  a  Committee  of  Officials. 
Companies  having  plans  that  are  examples  of  this  type  are: 
Procter  and  Gamble  Co.,  General  Electric  Co.  Lynn  Works, 
Hardwick  and  Magee  Co.,  Sprague  Electric  Works,  Remington 
Arms  Union  Metallic  Cartridge  Co.,  and  Reliable  Stove  Co. 

The  executive  council,  the  smaller  of  the  two  works  councils  of 
the  Procter  and  Gamble  Co.,  considers  subjects  that  pertain  only 
to  the  welfare  of  the  employees.  The  duties  of  the  other  bodies 
are  those  involved  in  gaining  settlements  in  all  matters  that  need 
adjustment. 

The  works  council  receives  any  matter  that  is  referred  to  it 
after  it  has  gone  to  the  foreman.  If  this  council  cannot  settle  the 


469]      NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  65 

matter,  it  is  referred  to  a  special  committee  appointed  by  the 
chairman  of  the  works  council.  The  committee  cannot  make 
decisions;  it  only  investigates  the  case  and  makes  recommenda- 
tions to  the  joint  works  council.  The  decision  of  the  joint  works 
council  is  binding  if  a  majority  vote  of  each  side  of  the  council 
can  be  reached.  If  no  decision  is  reached,  the  matter  is  referred 
to  the  committee  on  appeals,  which  is  composed  of  the  plant 
superintendent,  general  superintendent,  and  president  of  the 
company.  The  decision  of  this  committee  is  binding. 

In  the  plan  of  the  General  Electric  Co.  Lynn  Works,  each  joint 
shop  committee  may  investigate  and  make  decisions  on  any  mat- 
ter referred  to  it  by  an  employee,  after  he  has  discussed  it  with 
the  foreman.  If  the  employee  is  not  satisfied  with  the  decision  of 
the  joint  shop  committee,  and  if  this  decision  has  not  been  made 
by  a  unanimous  vote,  he  can  carry  it  to  the  manufacturing  en- 
gineer or  department  head.  If  he  gains  no  satisfaction  there,  he 
refers  it  to  the  general  joint  committee  on  adjustments.  If  the  de- 
cision of  this  joint  committee  is  unanimous,  the  matter  is  settled. 
If  it  is  not  unanimous,  the  employee  may  take  the  matter  on  up 
to  the  manager.  The  right  of  appeal  is  valid  only  if  the  employee 
first  brings  up  the  matter. 

3.  Settlement  by  a  Joint  Committee.   In  this  group  no  method 
for  arbitration  is  provided.  The  employees  of  the  companies  hav- 
ing this  manner  of  settlement  must  be  content  with  a  joint  special 
committee  as  the  ultimate  body  to  which  it  can  appeal.  The  plan 
of  the  S.  F.  Bowser  Co.  is  an  example  of  this  group. 

In  this  plan,  any  matter  brought  up  for  adjustment  is  appealed 
to  the  joint  committee  on  adjustment  after  an  attempt  to  have 
it  settled  by  the  foreman  and  employees'  and  employer's  repre- 
sentatives has  been  made  and  has  failed.  This  committee  inves- 
tigates the  case  very  thoroughly.  If  a  decision  can  be  reached,  that 
decision  is  final  and  all  controversy  is  closed.  If  no  settlement  is 
made,  the  matter  is  taken  up  by  the  joint  works  council.  Appeal  to 
the  joint  committee  on  final  appeal  is  granted.  The  decision  of  this 
body  is  ultimate  and  binding  on  the  employees  and  employers. 

4.  Settlement  by  the  Joint  Works  Council.    In  this  group  the 
plans  provide  no  means  of  final  settlement  other  than  the  deci- 
sions of  the  joint  works  council.  The  plans  of  the  Bridgeport  Brass 
Co.  and  the  Reliable  Co.  are  typical  of  this  group. 


66      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [470 

The  plan  of  the  Bridgeport  Brass  Co.  provides  that  all 
matters  needing  adjustment  first  go  through  the  regular  form 
of  being  taken  to  the  foreman.  If  a  matter  is  not  satisfactorily 
settled  in  that  way,  it  may  be  referred  to  the  group  committee 
(one  of  the  shop  committees)  of  that  section,  where  there 
must  be  a  unanimous  vote  for  an  effective  decision.  If  the 
vote  is  not  unanimous,  the  matter  is  referred  to  the  division 
committee  (another  shop  committee),  whose  vote  must  be  unani- 
mous. If  it  is  not  a  unanimous  vote,  the  matter  is  carried  on  to 
a  joint  works  council  (executive  committee),  where  a  majority 
vote  may  decide  it. 

The  foregoing  discussion  reveals  considerable  heterogeneity  re- 
specting the  method  of  procedure,  functions,  and  authority  pro- 
vided for  in  American  non-union  council  plans.  Due  to  this 
heterogeneity,  accurate  summarizing  is  impossible;  however,  it  is 
of  value  to  state  at  this  point  the  most  typical  provisions  regard- 
ing procedure,  functions,  and  authority. 

The  typical  plans  have  only  broad  generalizations  concerning 
functions.  There  is  commonly  some  reference  to  the  function  of 
cooperating  with  the  management  to  gain  greater  efficiency,  jus- 
tice, and  good  will;  but  the  most  general  and  essential  provision 
is  that  all  matters  needing  adjustment  can  be  considered  by  the 
councils.  There  are  only  exceptional  cases  of  limitation  on  matters 
with  which  they  deal.  Special  committees  to  deal  with  special  sub- 
jects, such  as  sanitation,  safety,  and  recreation  are  quite  common. 
The  functions  actually  performed  by  these  councils  are  described 
at  length  in  Chapter  IV. 

The  typical  provision  for  procedure  is  that  matters  needing 
adjustment  shall  be  first  presented  to  the  foreman  or  some  other 
company  official,  either  directly  by  the  worker  or  through  his 
shop  representative.  It  shall  then  pass  on  to  the  joint  committee 
lowest  in  rank  in  the  plan;  on  through  to  the  highest  joint  body; 
to  the  highest  company  official;  and  to  arbitration,  if  necessary 
in  order  to  gain  a  settlement  satisfactory  to  the  worker,  or  his 
representative  in  the  various  bodies. 

Respecting  authority,  settlement  within  the  joint  bodies  in 
many  cases  is  by  majority  vote,  and  in  many  plans  by  agreement 
or  unanimous  vote.  In  the  majority  of  plans  final  settlement  is  by 


471  ]      NON-UNION  COUNCIL  MOVEMENT  IN  THE  UNITED  STATES  67 

arbitration,  while  in  some,  provision  is  made  for  final  settlement 
by  a  special  joint  committee,  the  joint  works  council,  or  by  the 
highest  company  officials. 

It  is  highly  significant  to  notice  that  in  the  course  of  this  in- 
vestigation there  were  found  several  instances  of  companies  hav- 
ing enlarged  the  authority  of  their  joint  councils  after  they  had 
had  experience  with  them;  but  not  a  single  instance  of  delimita- 
tion of  the  authority  of  the  joint  councils  was  discovered. 


CHAPTER   III 

THE  THEORY  OF  THE  COUNCIL  MOVEMENT 
A.  THE  LARGER  ASPECTS  OF  THE  COUNCIL  MOVEMENT 

The  recent  council  movements  in  foreign  countries,  especially  in 
England,  Germany,  and  Austria,  have  been  fostered  chiefly  by  the 
conservative  political  parties,  or  by  the  employing  classes,  as  a 
means  of  avoiding  more  radical  reforms  and  of  gaining  the  co- 
operation of  labor  in  the  industrial  process.  In  the  United  States, 
the  non-union  council  movement  has  also  been  fostered  by  gov- 
ernment boards  and  by  employers  for  the  purpose  of  gaining  the 
cooperation  of  labor  or  to  check  the  growth  of  unions.  However, 
granting  that  the  council  movement  has  been  fostered  largely  by 
certain  political  groups  and  by  employers,  for  other  than  purely 
democratic  aims,  it  is  none  the  less  true  that  the  joint  council 
movement  is  a  part  of  a  larger  evolutionary  movement  toward 
democratic  industrial  management,  and  is  a  result  of  the  deeper 
forces  which  underlie  that  movement. 

The  type  of  industrial  management  which  has  prevailed  in  the 
immediate  past  has  been  properly  described  by  the  adjectives, 
"autocratic,"  or  "aristocratic,"  meaning  thereby  that  industrial 
concerns  have  been  largely  controlled  by  single  owners  or  em- 
ployers, or  relatively  small  groups  of  owners  or  employers.  The 
great  mass  of  those  belonging  to  these  respective  industrial  groups 
has  been  practically  without  a  voice  in  their  control. 

Democratic  government  has  been  aptly  defined  as  "that  form 
in  the  constitution  and  administration  of  which  the  mass  of  the 
adult  population  have  a  direct  or  indirect  share."1  The  essence  of 
the  democratic  principle  is  the  extension  of  a  share  or  voice  in 
government  to  all  of  the  qualified  members  of  the  group.  It  may 
be  said  without  fear  of  contradiction,  that  no  other  principle  oc- 
cupies a  more  fundamental  position  in  the  beliefs,  customs,  and 
institutions  of  western  civilization  than  the  principle  of  democratic 
government.  No  other  principle  is  cherished  more  dearly,  and  no 
other  principle  would  be  defended  more  desperately.  The  lessons 
of  history  and  of  personal  experience  have  firmly  imbedded  in  the 
minds  of  the  great  majority  the  belief  that  a  well  balanced  regard 

JGarner,  J.  W.,  Introduction  to  Political  Science,  p.  219. 

68 


473]  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  69 

for  the  values  in  all  the  human  lives  within  a  social  group  is 
most  closely  approximated  when  every  qualified  member  exer- 
cises, as  nearly  as  may  be,  an  equal  voice  in  the  government  of 
the  group. 

This  belief  in  the  democratic  principle  made  the  onward  march 
of  democratic  political  government  irresistible.  But  the  affairs  of 
men  are  not  separated  into  water-tight,  unrelated  compartments. 
That  type  of  government  which  proves  to  be  best  adapted  for  at- 
taining liberty,  justice,  and  equality  in  affairs  of  state  tends  to  be 
adopted  in  other  phases  of  group  life.  This  may  be  clearly  seen 
in  religious  affairs.  The  steady  trend  toward  more  democratic 
government  within  American  churches  has  been  oftentimes  re- 
marked. Whenever  a  common  aim  brings  together  a  group  of 
American  citizens  the  methods  of  democratic  government  tend  to 
be  adopted.  General  or  representative  assemblies,  elected  officers, 
free  discussion,  settlement  of  issues  by  majority  vote,  constitute 
the  American  citizen's  concept  of  group  government.  This  type 
of  government  is  adopted  in  the  religious  group,  the  chamber  of 
commerce,  the  lodge,  the  mutual  benefit  association,  the  coopera- 
tive group,  and  the  fraternal  organization. 

It  would  be  strange  indeed  if  among  these  people  thus  steeped 
in  the  ideals  and  practices  of  democracy,  there  should  exist  one 
group  in  which  autocratic  rule  held  sway,  without  dissatisfac- 
tion on  the  part  of  many  members.  The  institution  of  private 
property  has  brought  it  about  that  the  industrial  groups  in  which 
many  citizens  combine  in  close  association  to  further  a  common 
aim  have  been  largely  subjected  to  autocratic  control.  But  dis- 
satisfaction with  such  conditions  was  inevitable.  The  workers 
have  called  for  democratic  management. 

The  most  significant  manifestations  of  the  workingman's  de- 
mand for  a  voice  in  the  management  of  industry,  and  of  the 
evolutionary  movement  toward  more  democratic  industrial  man- 
agement are  found  in  the  activities  and  accomplishments  of  organ- 
ized labor.  Through  the  medium  of  the  trade  union  movement, 
the  workers  in  many  industries  have  already  won  a  substantial 
share  in  the  control  of  wages,  hours,  conditions  of  work,  discharge, 
discipline,  institution  of  new  machinery,  and  similar  matters  di- 
rectly affecting  their  interests  and  well-being. 


yo      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [474 

Through  the  more  indirect  medium  of  legislation,  the  working 
class  and  the  general  public  have  also  exercised  an  ever  increasing 
influence  in  determining  the  policy  and  practices  of  industrial 
management.  The  employers  and  the  managers  have  found  them- 
selves restricted  in  a  multitude  of  ways  by  the  rules  laid  down 
through  the  medium  of  law.  Methods  of  financing;  methods  of 
marketing;  quality  of  products;  hours  of  labor;  wages  paid;  con- 
ditions in  factory,  shop,  or  mines;  processes  of  production;  and 
many  other  matters  have  been  regulated  by  law. 

It  is  as  a  part  of  this  evolutionary  movement  toward  democratic 
industrial  management  which  has  its  roots  deep  in  the  past, 
"carrying  with  it  the  strength  and  the  inevitableness  of  the  move- 
ment toward  political  democracy,"  that  we  must  view  the  recent 
developments  which  are  the  subject  of  this  study. 

The  council  movement  is  very  closely  related  to  the  two  earlier 
developments  described  above.  The  joint  industrial  councils  of 
England  and  the  United  States  are  a  development  based  upon 
trade  unions.  The  German,  Norwegian,  and  Austrian  works 
councils  are  required  by  law  and  cooperate  with  the  unions,  while 
many  of  the  works  councils,  shop  committees  or  similar  organiza- 
tions in  the  United  States  are  either  a  result  of  governmental  de- 
crees, or  are  adopted  in  order  to  defeat  the  trade  unions.  Where 
the  works  councils  have  been  inaugurated  by  law  or  governmental 
decree,  the  activities  of  the  trade  unions  have  been  among  the 
chief  causes  for  such  laws  and  decrees. 

This  strong  and  growing  demand  among  the  workers  for  more 
democratic  industrial  management  has  been  the  primary  reason 
why  certain  employing  or  governing  classes  have  found  it  most 
advantageous  to  adopt  joint  council  plans  in  order  to  check  more 
radical  reforms,  or  to  avoid  or  destroy  unionism.  Therefore,  it 
would  be  a  misinterpretation  of  the  joint  council  movement  to  re- 
gard it  as  a  movement  based  upon  the  theories  in  the  minds  of 
those  actively  fostering  it.  It  is  fundamentally  a  result  of  the 
widespread  belief  that  social  welfare,  equality,  justice,  liberty,  and 
similarly  desired  ends  can  be  attained  best  in  group  life  under  a 
democratic  form  of  group  control.  Viewed  in  this  light,  these  joint 
councils  are  seen  not  as  a  result  of  the  petty  schemes  of  powerful 
individuals  or  governments,  but  as  the  result  of  the  working  of 
great  primary  principles  which  underly  a  broad  evolutionary 
movement. 


475]  THE  THEORY  OF  THE   COUNCIL  MOVEMENT  Jl 

B.   THE  COUNCIL  MOVEMENT  AS  A  MEANS  TO  CHECK 
THE  GROWTH  OF  UNIONS 

The  council  movement  in  the  United  States  has  been  directly 
sponsored  by  the  employing  class.  Two  motives  which  overlap  to 
some  extent  have  impelled  the  many  employers  to  adopt  vol- 
untarily some  form  of  employee  representation  in  manage- 
ment. One  of  these,  and  probably  the  more  prevalent  one,  is  the 
motive  of  increasing  the  productive  efficiency  of  the  workers  by 
eliminating  ill  will,  and  substituting  good  will  and  a  spirit  of  co- 
operation between  the  management  and  men.  The  second  motive 
is  to  oppose  unionism  effectively.  The  latter  one  has  been  pres- 
ent both  in  the  case  of  firms  where  unions  are  already  established 
and  of  firms  where  individual  barganing  still  prevails. 

In  the  packing  industry  and  the  railroads,  there  have  been  ex- 
amples of  the  adoption  of  local  council  plans  in  order  to  substitute 
localized  collective  bargaining  for  collective  bargaining  with  well 
organized  and  strong  unions. 

However,  the  large  majority  of  American  non-union  council 
plans  have  been  adopted  in  concerns  in  which  the  men  are  not 
sufficiently  organized  to  obtain  any  substantial  degree  of  collec- 
tive bargaining.  In  many  of  these  cases,  there  has  been  no  im- 
mediate danger  of  organization.  This  is  particularly  true  respect- 
ing a  large  number  of  the  council  plans  adopted  during  the  recent 
period  of  depression  when  the  employer  held  the  whip  hand. 
Nevertheless,  the  conclusion  reached  in  this  study,  and  elsewhere 
discussed,2  is  that  the  majority  of  these  local  non-union  council 
plans  have  been  adopted  either  in  an  attempt  to  break  existing 
unions,  or  to  avoid  what  has  been  considered  as  the  otherwise  in- 
evitable coming  of  collective  bargaining  with  unions. 

Relieved  of  the  camouflage  that  generally  bedecks  it,  the  theory 
underlying  this  anti-union  attitude  is  that  the  employer  can  bar- 
gain more  effectively  and  satisfactorily  with  a  local  organization 
than  he  can  with  a  strong  trade  union.  A  sort  of  compromise  be- 
tween collective  bargaining  and  individual  bargaining  is  obtained. 
Further  discussion  of  this  point  must  be  left  to  a  later  chapter.3 

'See  Chapter  VI. 
•Ibid. 


72      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [476 

C.  DEMOCRATIC  INDUSTRIAL  MANAGEMENT  AS  A  MEANS 
TO  INDUSTRIAL  EFFICIENCY 

i.  The  General  Theory.  Compared  with  autocratic  government, 
democratic  government  is  not  ordinarily  considered  efficient.  On 
the  contrary,  it  is  often  considered  inefficient,  to  be  preferred  only 
because  it  furthers  social  welfare  by  gaining  more  of  justice  and 
equality. 

The  case  for  more  democratic  industrial  management,  as  at- 
tained under  collective  bargaining  through  unions,  has  generally 
been  stated  much  more  in  terms  of  its  power  to  gain  justice, 
equality,  and  liberty,  than  in  terms  of  increased  production.  On 
the  other  hand,  the  case  against  unionism  has  been  based  chiefly 
upon  its  demoralizing  effect  upon  production.  Strikes,  either  open 
or  on  the  job,  restriction  of  output,  defeat  of  scientific  manage- 
ment, and  many  similar  blows  at  industrial  efficiency  have  been 
laid  at  the  door  of  the  unions. 

In  contrast  to  this,  the  recent  council  movement  has  been  often- 
times fostered  as  a  constructive  means  to  greater  efficiency. 
Among  the  definite  purposes  ascribed  to  the  joint  councils  recom- 
mended in  the  Whitley  report,  are  the  following:  "securing  in  the 
development  of  reconstruction  the  largest  possible  measure  of  co- 
operation between  employers  and  employed;  the  better  utiliza- 
tion of  the  practical  knowledge  and  experience  of  the  workpeople; 
industrial  research  and  full  utilization  of  its  results;  provision  of 
facilities  for  the  full  consideration  and  utilization  of  inventions 
and  improvements,  designed  by  workpeople;  improvements  of 
processes,  machinery,  and  organizations  ....  with  special  refer- 
ence to  cooperation  in  carrying  new  ideas  into  effect." 

Similarly,  in  the  United  States,  the  council  movement  has  been 
advocated  as  a  means  to  increase  efficiency.  The  extensive  work 
of  the  Shipbuilding  Labor  Adjustment  Board  and  of  the  National 
War  Labor  Board  in  introducing  joint  works  councils  and  joint 
shop  committees  into  American  industry  was  carried  on  as  a  part 
of  the  nation's  great  efforts  to  increase  production  during  the 
war.  The  primary  aim  was  the  furthering  of  efficient  production 
of  war-time  necessities. 

Moreover,  the  council  movement  in  the  United  States  has  been 
chiefly  a  voluntary  movement,  and  the  voluntary  adoption  of 
council  plans  has  been  partly  an  effort  to  install  scientific  person- 


47/1  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  73 

nel  management,  with  the  aim  of  increasing  efficiency.  Examina- 
tion of  the  constitutions  of  the  works  councils,  or  shop  committee 
plans,  in  American  industries  has  shown  that  their  object  is  gen- 
erally stated  in  terms  of  gaining  industrial  efficiency,  or  that  this 
aim  is  implied  in  the  stated  object  of  gaining  industrial  peace, 
harmonious  relations,  and  resulting  steady  cooperative  effort. 

Finally,  it  may  be  noted  that  much  of  the  literature  of  the 
works  council  movement  has  been  produced  by  industrial  engin- 
eers, personnel  and  employment  managers,  advocates  of  scientific 
management,  and  university  professors.  Among  these  students 
and  proponents  of  democratic  industrial  management,  great  em- 
phasis is  given  to  the  argument  of  increased  efficiency. 

Arguments  for  democratic  industrial  management,  as  a  means 
to  greater  efficiency,  are  generally  based  upon  the  proposition  that 
to  gain  increased  efficiency  the  workers'  good  will  and  desire  to 
cooperate  must  first  be  gained. 

The  opening  passage  of  a  recent  book  written  by  two  propon- 
ents of  joint  councils  in  industrial  management  reads  as  follows: 

"The  new  focus  in  administration  is  to  be  the  human  element. 
The  new  center  of  attention  and  solicitude  is  the  individual  per- 
son, the  worker.  And  this  change  comes  about  fundamentally 
for  no  sentimental  reasons,  but  because  the  enlistment  of  human 
cooperation,  of  the  interest  and  good  will  of  the  workers  has  be- 
come the  crux  of  the  production  problem."4 

The  proponents  of  the  council  movement  find  the  cause  of  pre- 
vailing ill  will  and  lack  of  cooperation  in  two  facts:  first,  the 
laborer  will  not  cooperate  in  the  industrial  process  when  he  does 
not  have  confidence  that  he  is  receiving  justice;  and  second, 
laborers,  in  general,  do  not  at  present  have  confidence  that  auto- 
cratic industrial  management  accords  them  justice.  They  point 
out  that  the  activities  of  organized  labor  and  the  powerful  So- 
cialist, Syndicalist,  and  labor  parties  have  been  characterized  by 
bitter  fighting  against  employers  and  a  system  which  they  be- 
lieve to  be  unjust.  Injustice  or  actions  believed  to  be  unjust  do 
not  call  forth  cooperation,  but  are  the  direct  stimuli  to  the  instinct 
of  pugnacity,  and  sentiments  of  fear,  hate,  and  resentment.  The 
workers,  as  a  class,  believe  they  are  being  treated  unjustly,  the 
result  of  which  is  suspicion,  ill  will,  and  refusal  to  cooperate. 

Tead,  Ordway,  and  Metcalf,  Henry  C.,  Personnel  Administration,  p.  i. 


74 

One  particularly  significant  source  of  evidence  on  this  point  is 
found  in  the  testimony  of  employers,  industrial  engineers,  and 
employment  managers  to  the  effect  that,  in  introducing  a  joint 
council  plan,  the  first  obstacle  which  must  be  overcome  is  the  dis- 
trust of  the  workers.  The  workers  invariably  take  the  attitude 
that  something  is  being  "put  over"  on  them. 

Mr.  Wm.  Demuth,  president  of  Demuth  and  Co.,  testifies  that 
"at  first  his  workers  were  cold  and  suspicious,"  and  that  the  most 
difficult  task  in  installing  a  works  council  plan  is  to  "establish 
confidence  between  the  worker  and  executives."5 

Dr.  Charles  P.  Steinmentz,  chief  consulting  engineer  of  the 
General  Electric  Co.,  states  that  many  concerns  have  advanced 
schemes  for  cooperation  which  have  failed  because  "they  originat- 
ed with  the  company,  and  the  worker  had  nothing  to  do  with  the 
formulation  of  them.  In  all  such  cases  the  worker  does  not  accept 
such  suggestions,  even  if  they  might  work  for  his  good."6 

Dr.  Harry  Tipper,  who  has  made  extensive  first-hand  investi- 
gations of  joint  council  plans  in  the  United  States,  testifies  that 
employers  have  found  it  difficult  to  overcome  the  workers'  dis- 
trust. He  urges  that  those  in  charge  of  installing  such  plans 
should  have  the  aid  of  the  men  in  the  sales  department  who  are 
able  to  sell  the  idea  to  the  workers.  This  is  needed  because  their 
"prejudices  are  so  deeply  rooted,  their  suspicions  so  firmly  and 
deeply  intrenched,  and  the  process  of  eliminating  them  and  re- 
placing them  with  good  will  and  cooperation  must  be  a  long, 
laborious,  and  delicate  job."7 

Speaking  of  his  experience  in  installing  "industrial  democracy" 
plans  for  many  industrial  concerns  in  the  United  States,  John 
Leitch  says:  "I  have  found  no  particular  welcome  for  my 
ideas.  I  have  usually  been  received  with  suspicion  as  a  'guy,' 
taken  on  by  the  management  to  'put  something  over.'  Their 
second  suspicion  is  that  I  am  a  disguised  efficiency  man,  and  that 
I  am  going  to  pull  some  new  speeding  up  stunt  out  of  my  bag.  It 
takes  weeks  and  weeks  to  replace  this  ill  will  with  good  will."8 

^Factory,  Vol.  23,  September,  1919,  pp.  502-504. 
^Automotive  Industry,  Vol.  40,  April  17,  1919,  p.  831. 
''Automotive  Industry,  September,  1920. 
'Leitch,  John,  Man  to  Man,  p.  176. 


479]  THE   THEORY   OF  THE   COUNCIL   MOVEMENT  75 

One  prominent  American  employer,  whose  concern  has  adopt- 
ed a  joint  works  council  plan,  makes  the  following  significant  ad- 
mission: 

"Aristotle  says,  'the  reward  which  a  liar  gets  is  that  no  one  will 
believe  him  when  he  tells  the  truth.'  Thus  are  industrial  relations 
troubled.  In  times  gone  by  management  and  men  have  tried  to 
outmaneuver  one  another.  They  are  now  laboring  under  a  burden 
of  mutual  suspicion  resulting  from  the  double  dealing  of  past  gen- 
erations."9 

The  proponents  of  democratic  joint  council  plans  maintain, 
therefore,  that  autocratic  management  in  industry  has  failed  at  a 
most  vital  point  in  the  production  process.  Autocracy  in  industrial 
management,  they  say,  "has  been  the  rule  for  many  generations, 
and  has  had  ample  time  to  prove  its  merits,  but  it  has  failed  to 
gain  the  laborers'  confidence  and  cooperation."  Inefficiency  has 
been  the  result. 

There  are  two  causes  for  this  situation.  The  employer  may 
treat  the  laborer  as  justly  as  he  can,  but  fail  to  gain  his  coopera- 
tion because  he  cannot  overcome  the  worker's  distrust,  and  con- 
vince him  that  he  is  being  treated  fairly.  Or  the  employer  may 
be  exploiting  the  worker.  In  other  words,  the  obstacle  to  in- 
creased cooperation  and  efficiency  may  be  either  that  justice  is 
not  being  awarded  to  the  worker,  or  that  the  worker  cannot  be 
convinced  that  he  is  being  treated  justly. 

More  democratic  industrial  management  is  advanced  as  a 
remedy  for  both  evils.  In  the  first  place,  it  is  urged  that  more 
democratic  industrial  management  will  result  in  more  justice  for 
the  worker.  The  defining  of  justice  in  specific  cases  of  conflicting 
interests  is  a  very  difficult  task.  The  problems  of  a  "fair  day's 
work,"  the  "just  wage,"  the  "square  deal"  in  division  of  the 
product,  or  "just  treatment  of  the  men  in  matters  of  promotion," 
and  dozens  of  similar  problems  in  industrial  justice  are  extremely 
complex.  There  are  many  minds  involved.  These  many  minds 
have  been  developed  under  diverse  environments  and  subject  to 
diverse  teachings  respecting  fundamental  principles  of  industrial 
justice.  No  accepted  body  of  industrial  law  has  been  developed 
which  defines  what  is  right  and  just.  In  this  field  of  industrial 

*McCormick,  Cyrus,  Proceedings  Annual  Convention  of  Industrial  Relations 
Association  of  America,  May  19-21,  1920,  p.  5. 


76      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [480 

justice  society  has  evolved  as  yet  but  few  if  any  widely  accepted 
principles.  The  employer's  attitude  that  he  is  fair  when  he  pays 
the  market  rate  of  wages  is  not  accepted  by  the  miners  who  re- 
ceive scarcely  a  living  wage,  and  who  read  in  their  morning 
paper  that  their  former  employer  has  died,  leaving  an  estate  of 
many  millions.  The  question  of  a  fair  day's  work,  involving  as  it 
does  such  fundamental  conflicts  of  interest  as  the  employer's  de- 
sire for  increased  profits,  the  public's  desire  for  more  products 
and  lower  prices,  and  the  workers'  desire  for  more  leisure,  pre- 
sents a  similarly  complex  problem. 

How,  amidst  these  tangles  of  conflicting  interests  and  desires 
and  diverging  opinions  of  industrial  justice,  can  we  most  nearly 
attain  a  balanced  regard  for  the  values  in  all  the  human  lives  in- 
volved ? 

The  proponents  of  the  joint  council  movement  believe  that 
one  fundamental  step  which  must  be  taken  in  order  to  gain  the 
closest  approximation  to  justice  in  most  situations  is  the  adoption 
of  a  more  democratic  form  of  industrial  management.  Chief 
among  the  arguments  advanced  to  support  this  view  is  that 
expressed  in  a  famous  passage  by  J.  S.  Mill,  which  is  oftentimes 
quoted  in  the  literature  of  the  joint  council  movement,  and  in 
which  democratic  government  is  defended: 

"Its  superiority  in  reference  to  present  well-being  rests  upon 
two  principles  of  as  universal  truth  and  applicability  as  any  gen- 
eral proposition  which  can  be  laid  down  respecting  human 
affairs.  The  first  is,  that  the  rights  and  interests  of  every  or 
any  person  are  only  secure  from  being  disregarded  when  the 
person  interested  is  himself  able,  and  habitually  disposed,  to 
stand  up  for  them.  The  second  is,  that  the  general  prosperity 
attains  a  greater  height  and  is  more  widely  diffused  in  proportion 
to  the  amount  and  variety  of  the  personal  energies  enlisted  in  pro- 
moting it. 

"The  former  proposition  that  each  is  the  only  safe  guardian  of 
his  own  rights  and  interests  is  one  of  those  elementary  maxims 
of  prudence  which  every  person,  capable  of  conducting  his  own 
affairs,  implicitly  acts  upon."10 

The  gist  of  all  this  is  that  what  constitutes  perfect  justice  in  a 
particular  industrial  situation  is  not  known  or  determinable;  and 

"Mill,  J.  S.,  Rfpresentativf  Government,  Chapter  III. 


481]  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  77 

that  a  compromise  between  conflicting  interests  is  all  that  can  be 
expected.  But  the  resulting  compromise  will  most  nearly  approxi- 
mate justice  if  each  party,  where  conflicting  interests  are  involved, 
has  a  chance  to  look  out  for  his  interests,  or  in  other  words,  has 
a  voice  in  the  management  of  matters  directly  affecting  his  wel- 
fare. 

Another  argument  for  more  democratic  industrial  management, 
as  a  means  to  obtain  more  just  treatment  for  the  worker,  is  found 
in  the  effect  upon  the  employer  of  contact  with  employee  repre- 
sentatives in  joint  councils. 

The  instinct  of  gregariousness,  the  predispositions  of  sympathy, 
sensitiveness  to  social  approval  and  disapproval,  altruism  and  the 
sense  of  justice,  are  sufficiently  strong  in  mankind  to  result  in  a 
fairly  social  type  of  behavior  among  people  closely  associated  and 
personally  acquainted.  The  master  workman,  working  at  the 
same  bench,  living  in  the  same  house,  eating  at  the  same  table 
with  his  journeymen  and  apprentices,  felt  an  interest  in  their 
welfare.  He  knew  their  problems,  their  hardships,  their  worries, 
and  their  ambitions.  If  he  was  a  normal  person,  he  sympathized 
with  them  and  desired  to  help  them.  Selfishness  was  checked  by 
sympathy,  altruism,  desire  for  their  approval,  and  a  sense  of  jus- 
tice. 

But  along  with  modern  large  scale  integrated  industry  has 
come  impersonal  industrial  relations.  The  personal  contact  be- 
tween the  employer  and  the  worker  has  been  lost.  Under  these 
new  conditions,  there  is  no  longer  adequate  stimulation  of  the 
social  instincts  and  predispositions.  That  personal  contact,  that 
vivid  perception  of  a  fellowman's  hardships  or  desires  which  con- 
stitute the  effective  stimulus  to  sympathy,  altruism,  and  the  sense 
of  justice  disappeared  when  the  factory  system  was  established. 

We  cannot  go  back  to  the  old  time  personal  relationship  in  in- 
dustry. But  a  personal  contact  and  acquaintance  between  the  em- 
ployer and  representative  workers  from  his  plant,  through  regular 
meetings  of  joint  councils,  offer  a  substitute  condition  which  has 
great  possibilities.  The  result  of  such  a  personal  contact  and 
acquaintanceship  is  that  the  employer  gets  the  worker's  point  of 
view  and  comes  to  see  him  as  a  human  being,  rather  than  as  so 
much  labor  power.  He  visualizes  his  human  side  with  its  home- 
making,  sickness,  unemployment,  children  to  educate,  desire  for 


78      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [482 

a  higher  standard  of  living,  and  many  similar  phases.  But  what 
is  most  important,  he  gets  these  directly  from  contact  with  a 
fellow  man,  and  getting  them  thus,  finds  his  social  instincts  and 
predispositions  stimulated.  His  concept  of  justice  and  his  pur- 
poses are  correspondingly  socialized.  Selfishness  is  checked  in  a 
healthful  and  natural  way. 

Finally,  it  is  urged  that  the  effect  of  more  democratic  industrial 
management  will  be  cumulative.  More  justice  will  be  accorded 
to  the  workers;  efficiency  will  be  increased;  and  employees  will 
find  that  just  treatment  pays,  and  so  will  strive  to  attain  still  more 
perfect  justice. 

According  to  this  theory,  then,  democratic  industrial  manage- 
ment will  help  to  overcome  the  obstacle  of  injustice,  and  there- 
fore, will  help  to  obtain  the  good  will  and  cooperation  of  the 
worker,  with  resulting  increased  efficiency.  However,  the  problem 
of  gaining  the  good  will  and  cooperation  of  the  laborer  is  not  al- 
ways solved  when  justice  has  been  accorded  him.  In  fact,  so  far 
as  the  question  of  efficiency  is  concerned,  the  problem  is  largely 
psychological.  It  is  not  significant  whether  justice  or  injustice 
prevails,  so  long  as  the  workingman  believes  that  he  is  receiving 
justice. 

Reference  has  been  made  above  to  the  deeply-rooted  suspicion, 
distrust,  and  prejudices  which  color  the  viewpoint  of  the  worker. 
He  habitually  distrusts  the  employer.  It  is  almost  a  custom 
among  the  workers  to  dislike  and  to  distrust  members  of  the  so- 
called  capitalistic  class.  The  young  worker  is  raised  in  an  en- 
vironment from  which,  through  the  words  and  actions  of  his  par- 
ents and  fellow  workers,  he  continually  receives  suggestions 
which  weave  into  the  very  texture  of  his  mind  this  suspicious 
attitude  toward  the  employing  class.  Under  these  conditions,  it  is 
not  surprising  to  find  that  the  worker  will  not  believe  the  pro- 
testations of  management  that  justice  and  a  square  deal  are  being 
accorded  to  all.  Whether  such  protestations  be  true  or  false,  in  the 
absence  of  any  other  source  of  knowledge  than  the  employer's 
assurances,  the  workers  will  be  suspicious  and  unresponsive. 

Democratic  industrial  management  offers  the  natural  remedy 
for  this  situation,  if  the  employer  is  sincere  and  the  facts  are  with 
him.  Having  failed  to  convince  the  worker  by  a  statement  from 
the  management,  the  employer  may  succeed  by  extending  to  the 


483]  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  79 

workers'  elected  representative  a  direct  share  in  management. 
Having  helped  to  investigate,  discuss,  and  decide  an  issue,  if  the 
decision  is  reasonably  just,  the  representative  will  be-  satisfied 
and  his  constituency  will  believe  his  report. 

This  phase  of  the  theory  of  more  democratic  industrial  man- 
agement, held  by  the  proponents  of  joint  council  plans,  is  in  no 
place  more  clearly  set  forth  than  in  their  writings  concerning 
scientific  management.  The  advocates  of  scientific  management 
have  claimed  that  industrial  justice  can  be  attained  best  by  the 
rule  of  competent  managers  with  their  staff  of  scientific  experts. 
These  experts  would  "substitute  for  the  arbitrary  unjust  rule  of 
persons  the  impartial  and  just  rule  of  facts."  The  advocates  of 
democratic  industrial  management  have  replied  that,  even 
though  it  were  possible  to  find  these  scientific  super-men  who 
could  and  would  work  out  the  rules  of  justice,  the  problem  of 
efficient  production  would  not  be  solved.  Experience  with  scien- 
tific management  has  demonstrated  the  most  fundamental  defect 
in  this  position  to  be  that,  even  though  exact  justice  in  matters 
such  as  wages,  hours,  conditions,  discipline,  shop  rules,  and  the 
like,  could  be  scientifically  determined,  the  workers  would  still 
refuse  to  believe  it.  They  do  not  trust  the  employer  or  his  hired 
efficiency  experts.  Organization  of  the  workers  in  some  form,  so 
that  they  may  have  a  voice  in  determining  what  constitutes  jus- 
tice, remains  the  condition  upon  which  their  confidence  and  co- 
operation can  be  obtained. 

The  scientific  managers  have  indeed  been  sadly  disillusioned  in 
assuming  that  workers  would  accept  the  opinion  of  scientific  ex- 
perts on  matters  of  justice.  The  laborers  have  disagreed  with 
almost  every  claim  made  by  scientific  management  respecting  the 
beneficial  effect  that  its  schemes  would  have  upon  labor.  They 
have  refused  to  bow  with  respectful  deference  to  the  superior 
knowledge  of  the  employer's  expert.  Scientific  management  has 
claimed  that  scientific  and  accurate  justice  would  result  from  their 
schemes.  The  workers  have  believed  that  scientific  management 
would  be  another  tool  in  the  hands  of  the  employers  to  increase 
production  and  profits  without  due  regard  for  the  laborers'  wel- 
fare. 


8o      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [484 

The  report  of  the  Garton  Foundation  reveals  this  attitude 
among  the  workers  in  England.11  Speaking  of  scientific  manage- 
ment, the  report  says: 

"Nevertheless,  it  is  regarded  with  profound  dislike  and  distrust 
by  the  general  run  of  workers,  and  in  a  great  many  cases,  at- 
tempts to  put  it  into  practice  have  had  to  be  abandoned. 

"The  reason  usually  given  by  the  men  for  their  hostility  is 
that  the  employer,  while  paying  higher  wages,  takes  care  that 
much  more  than  proportionate  increase  is  effected  in  his  own 
profits;  so  that  the  ratio  of  distribution  becomes  less  favorable  to 
labor  than  before  ....  Before  the  undoubted  advantages  of 
motion  training  can  materialize  in  workshop  practice,  full  security 
must  be  given  against  these  evils.  This  can  be  done  only  by  in- 
troducing the  system  with  the  full  voluntary  cooperation  of  the 
men;  and  such  cooperation  can  only  be  secured  by  .... 
transforming  the  whole  constitution  of  the  works  in  such  a  way 
that  the  men  themselves  may  have  an  interest  in  the  new  system 
and  some  share  in  control  over  the  working  of  it." 

A  further  argument,  presented  in  support  of  the  proposition 
that  democratic  industrial  management  is  the  best  means  to 
attain  that  situation  in  which  the  workers  will  believe  that  they 
are  being  treated  justly,  is  based  upon  the  proposition  that  the 
doctrine  of  human  equality  occupies  a  fundamental  position  in 
the  beliefs  and  institutions  of  western  civilization.  The  doctrine 
that  "all  are  created  equal,  and  have  equal  rights,"  is  stanchly 
upheld  by  the  workers.  One  of  those  rights  is  that  of  liberty.  But 
equality  and  liberty  in  industrial  relations  are  attained  only  by 
democratic  industrial  management,  for  democratic  management 
is  in  itself  an  important  phase  of  both  equality  and  liberty. 
Therefore,  since  "equality  of  status"  within  the  industrial  group, 
and  the  liberty  of  self-government  are  a  part  of  the  worker's 
concept  of  justice,  democratic  industrial  management  becomes 
the  necessary  condition  of  the  worker's  belief  that  he  is  being 
treated  justly. 

2.  Specific  Applications  of  the  General  Theory.  The  questions 
considered  in  this  section  are:  What  are  some  definite  matters 
in  respect  to  which  the  worker  has  shown  lack  of  confidence  in 

"Memorandum  on  the  Industrial  Situation  after  the  War,  Garton  Founda- 
tion, Harrison  and  Sons,  London,  1916. 


485]  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  8 1 

management?  How  will  more  democratic  industrial  government 
help  to  establish  confidence,  and  gain  cooperation  and  efficiency 
in  these  specific  cases? 

3.  Profits,  Dividends,  and  Financial  Methods.  The  most  im- 
portant problem  to  be  noted  arises  in  connection  with  profits  and 
dividends.  There  is  widespread  belief  among  the  workers  that 
excessive  profiteering,  in  the  sense  of  gaining  profits  or  dividends 
far  in  excess  of  any  normal  rate  of  returns  for  capital  invested  or 
risks  taken,  is  the  general  situation  in  industry. 

"Labor  knows,"  says  one  student  of  the  problem,  "that  there 
has  been  widespread  profiteering  on  the  part  of  the  employing 
class.  They  also  know  that  the  government's  statistics  show 
that  wages  have  not  kept  pace  with  prices.  Yet  employers,  as  a 
class,  have  demanded  lower  wages  and  by  systematic  propa- 
ganda have  tried  to  create  the  belief  in  the  public  mind  that 
labor  was  to  blame  for  higher  prices  and  that  to  continue  to  ask 
high  wages  would  be  to  continue  the  vicious  circle  of  robbery  of 
the  public.  How  can  cooperation  be  expected  to  exist  under 
such  conditions?  That  is  why  labor  is  asking  for  information  on 
profits  and  inside  finances  today.  Until  the  laborers'  distrust  on 
these  questions  is  cleared  up,  there  is  no  hope  of  cooperation."12 

R.  L.  Cormick,  workers'  representative  in  the  Arsenal  Orders 
Branch  of  the  Ordnance  Department,  has  expressed  a  growing 
attitude  among  American  workers  in  the  following  words: 

"Workers  are  everywhere  willing  and  anxious  to  cooperate  if 
their  interests  are  safeguarded.  Since  they  absolutely  control 
whether  they  will  cooperate  or  not,  they  demand  guarantees  of 
their  objective,  which  is  an  equal  division  of  product  between 
public,  employer,  and  worker."13 

In  England,  the  point  has  now  been  reached  that  the  organized 
workers  are  demanding  that  private  profits  be  abolished.  Long 
ago  they  passed  through  the  stage  of  merely  objecting  to  exces- 
sive profits;  to-day  the  strong  Labor  Party,  the  great  miners' 
union,  the  railway  unions,  and  many  others  are  demanding  the 
national  ownership  of  their  industries,  with  a  fixed  return  to 
capital,  fair  salaries  and  wages,  and  after  these,  the  lowest  pos- 

n Annals  of  the  American  Academy  of  Political  and  Social  Science,  Vol.  XC, 
July,  1920,  p.  17. 
"Ibid,  p.  32. 


82      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [486 

sible  prices  to  the  public.  There  is,  perhaps,  something  of  a 
warning  in  this  English  development,  for  while  the  majority  of 
laborers  in  this  country  are  not  yet  demanding  such  extremes,  yet 
the  miners  have  frequently  suggested  it,  and  the  railroad  unions 
have  actually  fought  for  a  plan  which  would  give  the  present  rail- 
road capitalists  government  bonds  with  a  fixed  and  fair  return, 
but  no  profits.  Long  continued  conditions  which  promote  the 
workers'  belief  that  exploitation  is  going  on  on  a  large  scale,  may 
bring  further  socialistic  developments  in  America  as  well  as  in 
England. 

The  files  of  the  various  union  publications  reveal  a  systematic 
effort  to  gain  insight  into  the  finances  of  their  respective  industries, 
and  to  make  the  facts  known  to  the  workers.  Even  the  advertise- 
ments of  an  industry  respecting  its  profit-making  ability  are 
played  up  in  flaring  headlines  in  the  labor  press,  together  with 
many,  no  doubt  exaggerated,  remarks  and  deductions. 

"Workers  of  all  the  basic  industries,  transportation,  coal  min- 
ing, iron  and  steel,  and  textile,  are  beginning  to  go  behind  the 
returns."  One  prominent  labor  leader  states,  that  "there  are  very 
few  unions  to-day  that  do  not  have  their  own  members  in  the 
employ  of  the  various  firms  as  bookkeepers  or  accountants,  so 
that  the  inside  financial  information  may  be  obtained."  It  is  well 
known,  of  course,  that  the  miners  and  railroad  workers  have  long 
had  expert  accountants  studying  the  financial  situation  of  these 
industries,  and  that  in  certain  branches  of  the  printing  and  cloth- 
ing industries,  accountants,  hired  by  both  labor  and  capital,  have 
made  the  reports  upon  which  wages  are  based. 

This  belief  in  profiteering  has  become,  to  some  extent,  chronic 
or  habitual  with  the  working  class  as  a  whole.  The  more  myster- 
ious the  business  is  made,  and  the  less  they  know  about  its 
finances,  the  more  exaggerated  are  their  ideas  respecting  them. 
They  assume  that  all  concerns  are  making  excessive  profits,  just 
as  they  assume  that  all  employers  are  trying  to  treat  them  un- 
justly. The  one  assumption  goes  with  the  other. 

The  second  phase  of  the  theory  of  democratic  industrial  man- 
agement outlined  above  finds  application  at  this  point.  The 
problem  for  the  many  industrial  firms  which  do  not  make  un- 
reasonable profits  is  to  find  a  method  of  convincing  the  workers 


487]  THE   THEORY   OF  THE   COUNCIL   MOVEMENT  83 

of  the  facts.  Many  concerns  in  this  situation  are  using  demo- 
cratic industrial  management  plans  for  the  purpose  of  proving 
to  the  workers  that  profiteering  does  not  exist. 

There  is  also  some  evidence  that  other  concerns  are  using  some 
forms  of  democratic  industrial  management  as  an  effective  means 
of  making  the  workers  believe  that  profiteering  does  not  exist, 
when  in  reality  they  are  exploiting  their  labor.  One  employer 
who  is  an  advocate  of  more  democratic  industrial  management 
has  quite  frankly  stated  that  he  has  investigated  a  great  many 
of  the  so-called  industrial  democracy  schemes  in  American  indus- 
tries, and  has  found  that  they  are  "99%  pure  bunk."1* 

The  idea  in  these  latter  cases  seems  to  be  that  the  employee 
members  of  joint  governing  bodies  are  easily  led  by  intelligent 
management  representatives;  and  that  since  they  will  not  believe 
management  directly,  they  can  be  most  efficiently  made  to  be- 
lieve they  are  getting  justice,  when  they  are  not,  by  first  satisfy- 
ing their  demand  for  a  share  in  management  through  representa- 
tives on  joint  councils,  and  then  by  revealing  fake  "business 
secrets"  to  deceive  those  representatives  thoroughly;  so  that  they 
will  report  to  the  workers  that  justice  is  being  received.  To  what 
extent  this  practice  is  carried  on  cannot  be  easily  ascertained  by 
the  outsider. 

In  either  case,  sincere  or  insincere,  the  theory  remains  the 
same.  The  gaining  of  the  cooperation  of  the  worker,  and  hence 
efficiency,  can  be  best  accomplished  by  convincing  him  through 
his  direct  participation  in  management,  or  through  his  represent- 
atives in  management  whom  he  will  believe,  that  he  is  getting  a 
square  deal  in  the  distribution  of  the  product. 

There  is  a  further  important  argument  which  is  often  advanced 
in  this  connection.  The  worker's  concept  of  justice  in  dividing 
the  products  of  industry  is  often  sadly  warped.  The  American 
Multigraph  Co.,  realizing  the  ignorance  of  its  employees  upon 
these  problems,  spent  two  years  in  carefully  conducting  a  plan 
to  educate  its  workers  up  to  the  point  of  being  ready  to  assume 
a  share  in  the  management  through  its  present  joint  council 
plan.  It  found  that  its  employees  were  totally  ignorant  on 
most  important  phases  of  management.  Many  did  not  even 
know  the  use  of  the  activities  of  certain  officials.  The  trade 

"Feiss,  Richard  A.,  A  National  Labor  Policy,  p.  5. 


84      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [488 

unions  also  recognize  this  ignorance  on  the  part  of  workers  in 
general  as  is  shown  by  their  condemnation  of  "company  unions," 
on  the  ground  that  the  workers  are  not  sufficiently  informed  and 
are  easily  deceived  by  the  employers. 

For  example,  the  worker  has  very  little  knowledge  of  such 
matters  as  the  functions  of  capital,  stocks,  bonds,  credit,  and  good 
will;  the  necessity  of  undivided  surpluses;  the  necessity  of  large 
depreciation  funds;  the  necessity  of  meeting  competitive  prices, 
of  expanding  the  plant,  or  acquiring  sources  of  material;  the 
necessity  of  paying  sufficient  salaries  to  hold  capable  managers; 
the  necessity  of  higher  returns  for  higher  risks;  and  many  other 
problems  of  management  which  must  be  considered  in  determin- 
ing justice  in  the  division  of  the  product  under  the  existing  in- 
dustrial system.  Now  if  the  workers  do  not  have  confidence  in 
the  direct  statements  of  the  employers,  some  other  method  for 
educating  them  properly  respecting  these  matters  must  be  found. 
Democratic  industrial  management  offers  a  way.  The  workers 
believe  their  own  representatives,  and  through  them  they  can  be 
convinced  of  these  business  facts  and  necessities.  Moreover, 
constant  rotation  of  offices  in  any  scheme  of  democratic  govern- 
ment gradually  builds  up  a  working  force  with  actual  experience 
in  managerial  problems.  In  this  way,  the  worker's  concept  of 
industrial  justice  may  be  made  more  intelligent  and  the  task  of 
gaining  his  cooperation  may  be  correspondingly  lightened. 

4.  Piece-Rates.  A  second  important  question  in  respect  to 
which  the  workers  distrust  the  management  is  that  of  piece-rates. 
Where  work  is  paid  for  by  the  piece,  it  has  been  the  general 
practice  of  workers  to  guard  very  carefully  against  any  speeding 
up,  because  they  have  come  to  believe  from  long  experience,  that 
if  the  employer  finds  they  are  making  a  high  wage,  relative  to 
the  prevailing  market  rate  for  such  labor,  he  will  cut  the  rates. 
The  result  of  such  a  condition  is  to  the  worker's  disadvantage. 
His  effort  to  produce  more  has  resulted  in  a  lower  piece-rate, 
making  him  then  give  more  work  for  the  same  pay  than  he 
formerly  received.  After  a  few  such  experiences,  the  normal 
functioning  of  human  instincts  causes  the  worker  to  strive  to  gain 
the  highest  possible  rate  for  the  least  possible  work.  Both  the 
fact  and  the  basis  of  cooperation  are  then  lost. 


489]  THE  THEORY   OF  THE   COUNCIL   MOVEMENT  85 

The  argument  for  democratic  management  in  the  control  of 
piece-rates  is  concisely  stated  in  the  following  paragraphs: 

"There  are  innumerable  ways  and  means  of  arriving  at  a  fair 
basis,  but  all  of  them  must  have  these  principles  in  common: 

"The  method  must  be  thoroughly  sold  to  the  people,  and  if  the 
method  cannot  be  sold,  it  is  bad,  no  matter  how  many  points  of 
merit  in  it  may  appeal  to  the  scientific  mind. 

"The  initial  rates  should  be  fixed  in  conjunction  with  an  elected 
committee  of  those  affected,  and  the  basis  should  be  a  scientific 
time  study,  every  point  of  which  is  understood  and  approved  by 
that  committee. 

"An  observance  of  the  above  principles  will  go  far  toward  over- 
coming the  chronic  hostility  to  measuring  pay  by  effort.  That 
hostility  arises  either  from  unfair  rates,  or  from  lack  of  knowledge 
of  how  rates  are  arrived  at.  Workmen  insist  that  scientific  rate 
fixing  is  only  a  device  to  wear  out  the  worker  for  the  benefit  of 

the  capitalist Scientific  planning  has  undoubtedly  been 

used  at  times  for  that  purpose."15 

In  this  case,  again,  there  are  the  two  groups  to  be  considered. 
One  group  of  employers  sincerely  condemns  rate  cutting  and 
has  resolved  not  to  practice  it.  These  employers  desire  to  gain 
the  workers'  cooperation,  so  that  production  may  be  increased 
and  all  members  of  the  industrial  group  may  prosper.  At  the 
same  time  there  are  unscrupulous  employers  who  desire  to  speed 
up  the  workers  and  then  cut  the  rates.  Both  groups  are  defeated 
by  the  workers'  refusal  to  speed  up.  It  is  probable  here,  as  in 
the  case  of  profits,  that  more  democratic  industrial  management 
can  and  is  made  to  serve  both  the  fair  and  the  unscrupulous. 
Giving  the  worker  a  share  in  determining  piece-rates  gives  him 
confidence  that  the  employer  is  sincere,  and  that  the  rate  cannot 
be  cut  without  his  consent.  Under  such  conditions,  his  coopera- 
tion is  gained;  he  is  willing  to  produce  more  in  order  to  earn 
more;  and  all  parties,  including  the  public,  prosper. 

On  the  other  hand,  the  employer  who  desires  to  cut  rates  can 
use  the  same  machinery.  He  may  give  the  employees  represen- 
tation on  the  council  which  determines  piece-rates,  as  a  means  of 
gaining  the  workers'  confidence  and  cooperation  in  increased 

"Basset,  William  R.,  When  the  Workmen  Help  You  Manage,  p.  48. 


86      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [490 

production.  Then  a  gradual  reduction  of  the  piece-rate,  without 
loss  of  efficiency,  can  be  accomplished  by  placing  able  leaders 
on  the  council,  who  persuade  the  workers'  representatives  that 
adverse  business  conditions  and  the  consequent  dire  straits  in 
which  the  company  finds  itself  necessitate  reduced  rates. 

5.  Financial  Incentive  Plans.  A  third  specific  instance  in 
which  more  democratic  industrial  management  helps  to  gain  the 
confidence,  cooperation,  and  the  resulting  increased  efficiency  of 
the  worker  is  found  in  the  case  of  the  financial  incentive  plan. 
The  principal  types  of  financial  incentive  plans  in  use  at  present 
are  profit-sharing,  economy  or  production  dividends,  and  the 
bonus.  These  plans  say  to  the  worker:  "Increase  your  efficiency, 
thereby  increasing  production,  and  you  will  receive  a  share  in 
the  gains  you  have  thus  made  possible."  The  reaction  of  the 
worker  to  this  proposal  is  not  different  from  his  customary  re- 
action to  the  employer's  proposal  that  he  work  harder.  His  atti- 
tude is  one  of  doubt  and  suspicion.  How  can  he  know  whether 
he  gets  a  fair  share  of  the  increased  gains  his  extra  efforts  have 
produced?  Must  he  take  the  employer's  word  for  it?  Is  it  not  a 
scheme,  like  scientific  management  and  piece-rates,  to  gain  for 
the  employer  a  large  profit  at  the  expense  of  the  workers?  Are 
not  these  profits  or  this  bonus  simply  a  scheme  to  keep  basic 
wages  down?  Where  is  the  customary  "joker"? 

It  is  the  consensus  of  opinion  among  authorities  in  this  field 
that  the  best  results  cannot  be  obtained  from  financial  incentive 
plans,  unless  the  confidence  of  the  worker  is  first  gained  by  giv- 
ing him  a  share  in  the  control  and  administration  of  such  plans. 

The  most  significant  evidence  that  can  be  given  on  this  point 
is  the  result  of  a  recent  study  made  by  the  Cleveland  Chamber 
of  Commerce.  As  a  rule,  Chambers  of  Commerce,  composed  of 
conservative  business  men,  champion  the  cause  of  workers'  con- 
trol in  industry  only  after  most  convincing  demonstrations  of  its 
efficiency.  This  study  is  an  extensive  one,  covering  the  incentive 
plans  of  over  six  hundred  business  concerns  in  Cleveland  and 
vicinity.  Eight  general  principles  are  given  in  the  final  report  as 
the  principles  which  experience  has  shown  to  be  the  best  ones 
upon  which  to  base  a  financial  incentive  plan.  The  sixth  principle 


491  ]  THE  THEORY   OF   THE   COUNCIL    MOVEMENT  87 

in  this  list  reads:  "They  (the  workers)  should  preferably  be 
represented  in  the  administration  of  the  plan."16 

6.  Health  and  Working  Conditions.  A  fourth  matter  to  which 
managers  are  giving  more  and  more  attention  because  of  its  great 
possibilities  in  increasing  production  efficiency,  is  the  improving 
of  the  workers'  health.  This  is  apparently  a  matter  of  mutual  in- 
terest to  both  employer  and  employees,  and  one  in  which 
the  workers  would  be  anxious  to  cooperate.  But  experience  has 
shown  otherwise.  The  workers'  habitual  tendency  to  look  for 
the  joker  and  to  distrust  the  employer  and  his  agents  is  ever 
present.  In  the  first  place,  the  basis  for  improving  the  health  of 
a  firm's  personnel  must  be  the  periodical  physical  examination. 
The  workers  have  often  opposed  this.  "Organized  employees 
have  from  time  to  time  raised  objections  to  physical  examinations. 
But,  upon  analysis,  the  objection  is  usually  found  to  apply  less 
to  the  examinations  themselves  than  to  the  abuses  which  might 
possibly  arise  from  them. 

"Organized  labor  apprehends  that  facts  discovered  by  medical 
examinations  may  be  used  to  jeopardize  the  position  of  industrial 
workers;  that  by  the  use  of  too  high  standards  competent  people 
may  be  debarred  from  employment  and  that  firms  may  use  the 
excuse  of  physical  incompetency  to  exclude  union  sympathizers. 
They  maintain  that  responsibility  for  preventive  or  curative 
health  should  be  jointly  assumed  by  employers,  workers,  and 
community.  The  president  of  the  American  Federation  of  Labor 
has  endorsed  medical  examinations,  provided  they  are  given  by 
publicly  employed  physicians  using  health  standards  which  have 
been  agreed  to  in  advance  by  the  organized  workers."17 

Laborers  are  here  again  suspecting  that  the  astute  employer 
has  conceived  another  plan  which  will  serve  his  own  interests  at 
the  expense  of  the  workers,  and  they  refuse  to  cooperate  without 
a  share  in  control  which  will  enable  them  to  know  that  their  in- 
terests are  being  safeguarded. 

Concerning  this  problem  of  health,  the  workers'  cooperation  is 
exceedingly  important.  The  average  worker  is  not  troubled  with 
ailments  of  an  acute  nature;  it  is  the  minor  ailments  that  con- 

""Employees'  Incentive  Plans  in  Cleveland  Industries,"  Report  of  the  Com- 
mittee on  Labor  Relations  of  the  Cleveland  Chamber  of  Commerce,  p.  4. 

"Tead,  Ordway,  and  Metcalf,  Henry  C.,  Personnel  Administration,  p.  87. 


88      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [492 

stantly  undermine  the  efficiency  of  the  working  force.  Indigestion, 
headaches,  bad  teeth,  exhaustion  due  to  lack  of  sleep,  colds,  sore 
throats,  and  many  similar  troubles  greatly  reduce  the  efficiency 
of  a  plant's  personnel  through  time  lost  from  work  or  through 
reduced  efficiency  during  working  hours.  But  what  are  the  chief 
means  of  prevention  in  these  cases?  In  the  first  place,  the  worker 
must  be  taught  the  importance  of  proper  air,  proper  clothing, 
proper  eating,  proper  amount  of  sleep  and  exercise,  proper  and 
prompt  care  of  colds  and  sore  throats,  importance  of  personal 
cleanliness,  and  many  similar  considerations.  And  in  the  second 
place,  he  must  apply  this  knowledge.  This  cannot  be  done  for 
him  by  the  manager.  It  is  a  personal  and  private  affair  which 
must  be  dependent  upon  the  worker's  desire  to  keep  himself 
physically  fit  for  his  work.  Until  the  worker  has  been  convinced 
that  increased  production  is  to  his  benefit,  this  difficult  problem  of 
efficiency  cannot  be  solved. 

The  same  situation  exists  in  the  matter  of  maintaining  working 
conditions  which  are  conducive  to  the  best  health  and  greatest 
efficiency  of  the  workers.  The  elimination  of  eye  strain  due  to 
facing  the  source  of  light,  and  nervous  exhaustion  due  to  irritating 
noises  and  vibrations,  are  to  a  considerable  extent  dependent  upon 
the  worker's  cooperation  in  assuming  the  correct  position  at  his 
bench  and  avoiding  unnecessary  noise  in  his  work.  The  maintain- 
ing of  effective  sanitary  conditions  are  also  dependent  upon  the 
worker's  cooperation.  The  proper  use  of  towels  and  lavatories, 
toilet  rooms,  drinking  facilities,  cuspidors,  are  important  consider- 
ations. Here  again  the  worker's  desire  to  cooperate,  based  upon 
his  belief  that  increased  efficiency  is  to  his  interest,  must  be  the 
basis  for  his  making  these  personal  efforts  to  further  the  physical 
welfare  of  the  plant's  personnel.  If  more  democratic  management 
through  joint  councils  can  stimulate  this  desire  to  cooperate, 
highly  important  results  can  thus  be  achieved. 

7.  Labor  Turnover.  Another  important  cause  of  inefficiency  in 
the  utilization  of  the  human  factor  in  industry  is  the  high  rate  of 
-labor  turnover  which  exists  in  the  majority  of  industrial  concerns. 
Replacing  a  man  in  the  industrial  organization  involves  the  work 
of  the  employment  office  in  examining  and  placing  a  new  man, 
which  often  includes  various  trade  or  educational  tests;  the  work 
of  the  foreman  in  training  new  men;  the  work  of  clerks  in  chang- 


493]  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  89 

ing  records;  time  lost  to  other  workers  through  idle  machinery 
when  new  men  make  mistakes;  cost  of  having  the  machines  idle; 
cost  of  repairs  of  machines  or  tools;  cost  of  damaged  materials; 
reduced  efficiency  until  the  new  worker  attains  the  skill  of  the 
one  he  replaced;  and  cost  of  accidents  which  are  more  frequent 
among  new  men.  Where  labor  turnover  is  as  high  as  100,  200, 
and  300%,  which  are  not  exceptional  figures,  it  is  apparent  that 
the  loss  of  efficiency  is  very  great. 

A  certain  amount  of  labor  turnover  is  unavoidable,  but  it  is 
now  generally  admitted  that  it  can  be  reduced  to  a  very  low 
figure  in  comparison  to  those  just  mentioned.  In  the  study  of  this 
subject,  the  fact  has  been  revealed  that  labor  turnover  is  in  a 
large  measure  due  to  causes  which  can  be  most  effectively  elim- 
inated under  democratic  industrial  management. 

In  the  first  place,  labor  turnover  is  due  to  the  arbitrary  and 
unfair  treatment  which  workers  receive  at  the  hands  of  foremen 
or  petty  officials.  This  leads  to  trouble  between  the  two  and  ends 
either  in  discharge  or  the  worker's  quitting.  When  foremen  or 
petty  officials  know  that  trouble  in  their  gang  or  department  is 
regarded  as  a  cause  of  inefficiency,  that  their  acts  and  words  are 
the  subject  of  discussion  in  a  joint  council  in  which  workers  and 
higher  officials  are  present,  and  that  if  they  are  at  fault  their 
acts  will  be  censured  and  annulled,  they  will  abandon  their  petty 
tyrannies  and  domineering  ways  and  strive  to  gain  the  good  will 
of  the  workers  by  according  them  the  respectful  and  fair  treat- 
ment which  they  desire. 

The  same  general  situation  exists  respecting  all  similar  causes 
of  labor  turnover.  Dissatisfaction,  due  to  favoritism  shown  by 
officials  in  matters  of  promotion,  or  in  discharging  men  in  order 
to  make  room  for  friends,  may  be  largely  eliminated  where  the 
workers  share  in  the  settlement  of  such  problems  through  a  joint 
council.  As  a  result  of  the  joint  control,  less  injustice  exists;  the 
imaginary  cases  of  injustice  are  cleared  up;  and  causes  for  dis- 
charge or  quitting  are  correspondingly  lessened. 

On  the  other  hand,  it  is  urged  that  democratic  industrial  man- 
agement functions  in  a  more  constructive  way  to  lessen  labor 
turnover.  The  worker's  belief  that  he  is  receiving  justice  in  the 
division  of  the  product,  that  he  has  a  real  control  over  his  job 
so  long  as  his  fellow  workers  judge  him  worthy  of  it,  and  the  new 


90      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [494 

interest  and  pleasure  which  he  feels  in  his  work — all  these  things 
function  to  create  in  the  worker's  mind  a  liking  for  his  job  and 
a  loyalty  to  the  company.  Under  such  conditions,  labor  turnover 
is  greatly  reduced. 

8.  Discharge.  As  a  means  of  handling  the  problem  of  discharg- 
ing men,  democratic  methods  have  certain  definite  advantages 
over  autocratic  methods.   In  the  first  place,  justice  is  more  nearly 
accorded  to  all  when  a  joint  body  of  workers  and  managers  has 
the  power  to  investigate  any  case  of  discharge,  and  to  reinstate 
the  man  if  it  desires.   Workers  testify  freely  before  such  a  body, 
thus  making  it  possible  to  get  a  fairer  presentation  of  both  sides 
of  the  case. 

Moreover,  security  of  tenure  and  the  resulting  security  and 
ownership  in  one's  job  are  basic  conditions  of  maximum  efficiency. 
Worry  and  fear  over  threatened  unemployment  seriously  reduce 
efficiency.  When  there  is  such  worry  and  fear  it  is  difficult  to  in- 
spire in  a  man  loyalty  or  interest  in  cooperating  to  improve 
methods  and  machines,  and  efficiency  in  general.  Democratic  man- 
agement, by  giving  the  worker  a  voice  in  the  control  of  discharge, 
assures  him  that,  so  long  as  he  is  judged  worthy  by  his  fellow 
workers  and  high  company  officers,  his  job  is  secure.  He  is  pro- 
tected from  arbitrary  or  unjust  dismissal  by  the  foreman  or  some 
other  petty  official.  This  control  over  the  matter  of  discharge  thus 
helps  to  restore  that  lost  sense  of  proprietorship  in  the  work, 
which  is  an  important  stimulus  to  better  workmanship. 

9.  Grievances.    Grievances  may  arise  in  connection  with  any 
phase   of   industrial    relations.    However,    in   this    discussion   of 
grievances  as  a  special  topic,  reference  is  made  particularly  to 
what  may  properly  be  called  petty  grievances.    There  is  general 
agreement  among  students  of  industrial  relations  that  very  much 
of  our  industrial  friction  may  be  traced  to  some  petty  dispute  be- 
tween a  foreman  and  a  worker.  J.  D.  Rockefeller,  Jr.  voiced  this 
same  thought  when  he  said  that  "experience  shows  that  the  vast 
majority  of  difficulties  which  occur  in  an  industry  arise  between 
workmen  and  the  subordinate  officers  who  are  in  daily  contact 
with  them." 

Another  important  source  of  grievance  is  found  in  the  mass  of 
shop  rules  and  regulations  to  which  the  worker  is  necessarily 
subjected  in  modern  large  scale  industry. 


495]  THE  THEORY   OF  THE   COUNCIL   MOVEMENT  91 

Are  these  petty  grievances  real  or  imagined?  The  statistics  of 
the  number  of  cases  settled  in  shop  committees  and  works  coun- 
cils generally  show  a  large  proportion  settled  in  favor  of  the 
workers.  Swift  and  Company,  for  example,  report  291  for  the 
workers  as  compared  to  126  in  favor  of  the  management.  This 
indicates  that  the  vast  majority  of  grievances  are  justified,  and 
that  their  proper  consideration  and  settlement  are  highly  im- 
portant if  good  will,  cooperation,  and  efficiency  are  to  be  gained. 

Henry  T.  Noyes  of  Rochester  states  that  in  his  company,  the 
Art-in-Buttons  Inc.,  periodic  department  meetings  have  been  held 
for  ten  years.  In  these  meetings  in  which  the  company  and  em- 
ployees cooperate  for  their  joint  good,  90%  of  the  complaints 
heard  were  justified  in  whole  or  in  part.  He  therefore  concludes 
that  under  the  usual  form  of  management  "a  tremendous  ag- 
gregate of  dissatisfaction  must  exist  and  must  be  incapable  of 
elimination  because  the  management  knows  nothing  of  it." 

Many  of  these  petty  grievances  lead  to  acute  industrial  disputes 
with  great  damage  to  efficiency.  But  it  is  most  important  to 
visualize  the  tremendous  loss  in  efficiency  which  must  come  from 
the  resentment,  ill  will,  and  antagonism  which  smolders  in  the 
thousands  of  workshops  as  a  result  of  petty  grievances  which 
do  not  bring  acute  disputes,  and  which  are  generally  never  set- 
tled. The  proponents  of  democratic  industrial  management 
emphasize  this  source  of  inefficiency,  and  offer  as  the  remedy  {or 
it  the  settling  of  grievances  by  the  joint  council  or  committee, 
with  final  appeal  to  arbitration. 

The  theory  in  this  case  is  that  in  the  joint  council  a  fair  con- 
sideration of  both  sides  of  each  dispute  can  be  attained;  that 
justice  will  be  more  nearly  approximated  in  settlements;  and  that 
the  men  will  be  better  satisfied  with  decisions  which  their  repre- 
sentatives have  declared  fair  and  necessary.  The  workers'  distrust 
of  the  management  makes  it  all  but  useless  to  provide  the  "open 
door  to  the  manager's  office"  as  the  solution.  Some  few  managers 
or  other  officials  may  gain  the  confidence  of  the  workers  sufficient- 
ly to  enable  them  to  settle  grievances  satisfactorily  to  all  con- 
cerned; but  the  general  situation  is  one  of  distrust,  which  makes 
the  joint  democratic  consideration  and  settlement  of  grievances 
necessary.  The  worker  will  present  grievances  to  his  represent- 
ative, who  is  his  fellow  worker,  when  he  will  not  take  them  up 


92      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [496 

with  officials  whom  he  fears  and  distrusts,  and  who  have  the 
power  to  discharge  him  or  discriminate  against  him  in  the  future. 
Democratic  consideration  and  settlement  of  grievances  thus  offer 
the  most  efficient  means  of  eliminating  the  inefficiency  which 
results  from  unsettled  grievances,  or  grievances  settled  in  an 
unsatisfactory  manner. 

10.  Shop  Discipline.  In  order  to  gain  efficiency  in  a  shop  or 
plant;  a  tremendous  number  of  rules  and  regulations  must  be  en- 
forced. There  must  be  rules  respecting  smoking,  drinking,  swear- 
ing, fighting,  absence,  tardiness,  obeying  directions  of  supervisors, 
procedure  in  case  of  fire  or  other  emergencies,  keeping  rooms 
clean  and  orderly,  sleeping  or  loafing  during  working  hours,  care 
of  tools  and  work  bench  or  machine,  sharpening  of  tools,  ringing 
of  time  clocks  or  punching  of  time  cards,  use  of  telephone,  seeing 
visitors  in  the  shop  or  plant,  passing  from  one  department  to 
another,  eating  during  work  hours,  notification  of  proposed 
absence,  et  cetera. 

The  average  worker  is  continually  revolting  against  this  mass 
of  apparently  petty  and  insignificant  regulations.  He  may  readily 
agree  that  he  ought  not  to  come  to  work  drunk,  but  it  is  difficult 
for  him  to  understand  why  he  cannot  use  the  plant  telephone, 
why  he  will  not  be  called  to  the  telephone,  or  why  a  visitor  can- 
not see  him.  He  cannot  comprehend  the  significance  of  such 
rujes,  and  he  may  be  bitter  and  resentful  about  these  "company 
straight-jackets."  That  they  will  not  let  him  answer  the  telephone 
may  seem  to  him  to  be  the  very  limit  of  greedy  exploitation  of 
workers  without  regard  for  their  feelings  or  desires.  When  such 
rules  are  very  numerous  and  the  worker  is  running  into  them 
at  every  turn,  his  resentment  may  be  fanned  to  a  flame,  and  the 
spirit  of  cooperation  and  good  will  destroyed. 

It  seems  to  be  generally  true  that  workers  seldom  give  whole- 
hearted cooperation  in  observing  arbitrarily  imposed  rules,  but 
grasp  every  opportunity  to  violate  them  when  not  being  watched. 
Many  such  rules  are  necessary,  but  if  maximum  efficiency  is  to 
be  attained  they  must  be  willingly  and  sincerely  obeyed  by  the 
workers. 

It  is  the  theory  of  democratic  industrial  management  that  the 
most  efficient  way  to  get  this  cooperation  in  the  enforcement  of 
shop  discipline  is  to  permit  the  workers  to  share  in  the  making  of 


49?]  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  93 

the  rules  and  the  imposing  of  penalties  for  their  infringement. 
That  self-imposed  rules  and  regulations  are  more  willingly  and 
consistently  obeyed  than  rules  arbitrarily  imposed  from  above 
is  a  proposition  that  does  not  need  defense. 

However,  the  primary  need  in  the  case  of  shop  rules  is  to  con- 
vince the  workers  of  the  significance  of  such  rules.  Since  the 
workers,  on  the  whole,  do  not  trust  an  autocratic  manager,  the 
only  efficient  way  to  convince  them  of  the  significance  and  neces- 
sity of  so  many  rules  and  regulations  is  through  their  represent- 
atives who  have  studied  the  need  of  such  rules  and  adopted 
them  in  the  joint  council.  Even  when  the  workers  are  thus  con- 
vinced of  the  necessity  of  obeying  all  the  rules  and  regulations  and 
other  phases  of  shop  discipline,  in  order  to  reach  greater  effi- 
ciency, they  must  still  be  convinced  of  the  basic  proposition  that 
greater  efficiency  is  to  their  interest.  They  must  be  convinced  that 
they  will  be  justly  rewarded  for  their  cooperation.  The  need  of 
more  democratic  industrial  management  to  gain  this  end  has  been 
discussed. 

ii.  Utilization  of  the  Knowledge  of  the  Workers.  Another  in- 
dustrial problem,  and  one  which  is  rapidly  gaining  recognition 
in  the  science  of  personnel  management  is  the  problem  of  utilizing 
the  hitherto  unused  knowledge  of  the  workers  regarding  the 
industrial  process.  This  has  been  vaguely  implied  in  the  foregoing 
pages  when  speaking  of  the  workers'  cooperation.  The  discussion 
so  far  has  emphasized  the  need  of  the  willing,  active  cooperation 
of  the  worker  in  carrying  out  the  clearly  defined  plans  of  the 
management.  The  proposition  here  is  that  the  workers  themselves 
have  much  knowledge  which,  if  utilized,  would  increase  industrial 
efficiency. 

This  phase  of  the  theory  of  more  democratic  industrial  manage- 
ment is  set  forth  in  the  Whitley  Committee  Report,  recommend- 
ing the  formation  of  joint  councils  in  English  industries.  Among 
other  purposes  of  these  councils,  the  following  are  stated:  the  bet- 
ter utilization  of  the  practical  knowledge  and  experience  of  the 
workpeople;  industrial  research;  full  consideration  and  utilization 
of  inventions  and  improvements  designed  by  the  workpeople; 
improvements  of  processes,  machinery,  and  organization. 

The  following  quotation  from  the  "Browning  Platform,"  a 
pamphlet  setting  forth  the  theory  of  democratic  industrial  man- 


94      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [498 

agement  as  practiced  in  the  Browning  Co.  of  Cleveland,  is  a  typ- 
ical statement  of  the  point  in  hand.  The  "Platform"  reads: 

"The  men  who  work  at  the  machines,  the  men  who  erect  the 
cranes,  the  men  who  inspect  the  finished  product,  all  are  in  posi- 
tions of  peculiar  advantage  to  see  opportunities  for  improving 
workmanship,  for  simplifying  designs,  for  avoiding  waste,  for 
speeding  up  manufacturing  methods  and  for  guarding  against 
error  or  defect  in  the  crane  as  it  leaves  the  plant.  Each  sees  the 
process  from  an  angle  entirely  his  own.  At  'Browning,'  this  brain 
power  and  this  opportunity  for  improvements  are  not  allowed  to 
go  to  waste.  The  'Browning  Plan'  allows  each  worker  to  prove  his 
own  thinking  ability  to  the  advantage  of  himself,  his  company, 
and  his  fellow  workers." 

Perhaps  the  most  significant  evidence  of  the  widespread  belief 
in  the  fact  that  the  workers  have  much  valuable  but  unapplied 
knowledge  is  found  in  the  development  of  "suggestion  systems," 
as  a  part  of  the  science  of  personnel  management.  The  suggestion 
system  is  a  plan  whereby  there  is  created  a  definite  machinery  for 
collecting  and  giving  careful  consideration  to  all  suggestions  which 
the  workers  can  give,  and  which  might  lead  to  increased  efficiency. 
Provision  is  supposed  to  be  made  for  payment  in  proportion  to 
the  value  of  these  suggestions. 

The  problem  which  immediately  arises  here  is:  How  are  these 
suggestions  considered?  Who  investigates  and  passes  upon  the 
value  of  these  suggestions  ?  If  the  employee  has  thought  out  some 
invention,  some  improvement  in  machinery,  or  conceived  some 
improvement  in  a  production  process  or  method,  he  is  prone  to 
exaggerate  its  possibilities;  consequently  when  the  customary  five, 
ten,  or  twenty-five  dollar  reward  is  given  him,  he  concludes  that 
his  good  intentions  have  not  been  appreciated,  and  that  the 
benefits  of  his  effort  to  increase  production  have  been  enjoyed 
mostly  by  the  employer.  He  probably  had  little  love  for  em- 
ployers before,  and  now  he  has  less.  Thus  the  autocratically 
managed  suggestion  system  has  oftentimes  been  found  not  only 
to  defeat  itself,  but  to  increase  the  ill  will  of  the  employees.  It 
was  this  problem  that  the  Whitley  Committee  had  in  mind  when 
it  urged  the  creation  of  joint  councils  in  industry  in  order  to 
secure  "the  adequate  safeguarding  of  the  rights  of  the  designers 
of  inventions  and  improvements." 


499]  THE  THEORY  OF  THE   COUNCIL   MOVEMENT  95 

The  solution  again  is  more  democratic  industrial  management. 
The  workers  must  have  a  share  in  the  administration  of  the  sug- 
gestion system,  so  that  they  may  learn  through  their  own  admin- 
istration that  they  are  receiving  a  fair  reward  for  their  sugges- 
tions. The  same  situation  characterizes  the  whole  problem  of 
getting  the  workers  to  volunteer  their  knowledge  of  possible 
industrial  improvements.  Their  good  will,  their  desire  to  cooper- 
ate, must  be  gained  first,  and  that  must  be  based  upon  their 
belief  that  their  efforts  will  be  justly  rewarded. 

12.  Promotion.  Promotion  occupies  a  position  of  prime  im- 
portance in  the  field  of  industrial  incentives.  Without  doubt,  the 
most  powerful  incentive  to  do  more  and  better  work,  and  to  co- 
operate wholeheartedly  in  the  production  process,  is  the  conviction 
in  the  worker's  mind  that  if  he  shows  ability  and  serves  faithfully, 
he  will  be  rewarded  by  promotion. 

Autocratic  control  of  industry  has  failed  to  a  considerable 
extent  to  make  the  most  of  this  incentive  as  a  means  to  increased 
efficiency.  The  reason  that  it  has  failed  is  inherent  in  the  nature 
of  autocratic  control.  Promotion  has  been  in  the  hands  of  certain 
officials  who  could  exercise  arbitrary  power  respecting  it.  This 
has  made  it  subject  to  all  the  limitations  of  the  individuals  exer- 
cising such  arbitrary  power.  Favoritism,  prejudice,  likes  and  dis- 
likes, grudges  and  enmities,  race  hatred,  religious  prejudice, 
politics,  graft,  jealousy,  ignorance,  spite,  revenge,  unjust  discrim- 
ination, are  among  the  many  obstacles  to  successful  autocratic 
control  of  promotion.  Is  the  worker  a  Catholic  and  does  the 
foreman  or  superintendent  hate  Catholics?  Is  the  worker  a  Jew 
and  does  the  official  hold  a  hatred  for  Jews?  Is  the  worker  a 
negro  and  does  the  official  hate  negroes?  Or  in  any  of  these 
causes  is  the  choice  between  one  of  the  official's  own  race,  religion, 
or  set,  and  one  of  some  other  race,  religion,  or  set?  Has  the 
official  a  friend  or  a  pal  in  the  group  or  outside  the  group,  that  he 
wishes  to  help  along?  Has  the  official  or  some  other  official  a 
relative  to  be  helped?  Have  there  been  petty  likes  and  dislikes 
and  jealousies  in  the  shop,  and  when  one  worker  is  promoted  to 
a  position  of  power  or  influence  does  he  remember  these?  Are 
there  foremen  or  officials  who  will  promote  the  man  who  will  tip 
them  off  properly?  These  are  but  a  few  of  the  questions  which 
exist  in  the  minds  of  the  workers  respecting  the  possibility  of 


96      WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [500 

gaining  promotion  under  autocratic  control.  In  a  great  many 
concerns,  the  mass  of  the  workers  hold  little  hope  of  promotion, 
and  it  is  safe  to  say  that  the  general  situation  is  one  in  which  the 
possibilities  of  this  incentive  are  little  realized. 

The  most  significant  single  source  of  evidence  of  the  truth  of 
the  situation  just  described  is  found  in  the  literature  and  articles 
of  scientific  management,  in  which  a  determined  fight  has  been 
waged  against  the  inefficient  use  of  the  promotion  incentive.  The 
claim  is  set  forth  that  inefficiency  in  arbitrary  personal  rule  can 
be  replaced  by  the  rule  of  facts,  so  that  promotion  will  depend 
upon  definite  accomplishments. 

There  is  no  doubt  that  scientific  management  can  do  much  in 
this  direction.  But,  if  the  position  defended  at  length  in  the 
early  part  of  this  discussion  is  well  taken,  the  lack  of  confidence 
in  management,  which  exists  among  the  workers,  is  extended  to 
the  management's  agents  and  experts.  It  was  shown  that  scien- 
tific management  must  be  based  upon  the  confidence  of  the 
worker  and  resulting  good  will  and  cooperation.  Therefore,  the 
ideal  situation  is  one  in  which  there  is  the  rule  of  facts,  or  pro- 
motion based  purely  on  accurately  measured  accomplishments; 
and  in  which  the  accomplishments  of  the  worker  are  measured 
and  recorded  by  scientific  experts  in  cooperation  with  represent- 
atives of  the  workers. 

SUMMARY 

In  the  foregoing  pages  an  effort  has  been  made  to  state  the 
theory  underlying  the  council  movement.  The  theory  as  present- 
ed may  be  summarized  as  follows: 

The  various  council  plans,  herein  discussed,  have  as  their 
common  and  essential  attribute  the  extension  to  the  worker  of 
a  larger  share  in  the  control  of  industrial  relations.  They  consti- 
tute, therefore,  a  definite  step  in  the  direction  of  more  democratic 
industrial  management. 

These  councils  have  been  fostered  by  employers  and  govern- 
mental authorities.  The  immediate  aims  of  these  sponsors  of  the 
movement  have  been  to  eliminate  ill  will  and  industrial  warfare; 
to  gain  good  will  and  cooperation;  to  increase  production;  to  sub- 
stitute local  collective  bargaining  for  collective  bargaining  with 
unions;  or  to  avoid  the  coming  of  more  radical  changes  in  in- 
dustrial organization.  But  the  council  movement,  viewed  in  its 


5Cl]  THE  THEORY   OF  THE   COUNCIL   MOVEMENT  97 

larger  aspect,  is  properly  interpreted  as  a  result  of  a  broader 
evolutionary  movement  toward  more  democratic  industrial  man- 
agement. The  reason  for  governments  and  employing  classes 
fostering  the  council  movement  has  been  found  to  lie  in  the  fact 
that  in  such  a  step  toward  more  democratic  industrial  manage- 
ment, they  have  found  their  only  means  of  obtaining  that  in- 
creased efficiency  which  depends  upon  the  workers'  good  will 
and  cooperation. 


CHAPTER  IV 

RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS 
IN  THE  UNITED  STATES 

It  has  been  estimated  that  there  are  between  seven  and  eight 
hundred  non-union  council  plans  in  operation  in  American  in- 
dustrial concerns,  and  that  more  than  a  million  workers  are 
participating  in  them. 

Theoretically,  these  councils  constitute  a  step  in  the  direction 
of  more  democratic  industrial  management,  and  obtain  for  the 
worker  a  larger  share  in  industrial  control.  The  extensive  claims 
made  concerning  the  results  which  such  councils  will  achieve  have 
been  described  in  the  preceding  chapter.  The  present  chapter  is 
devoted  to  a  survey  of  the  results  accomplished  by  existing  coun- 
cils. Such  an  inquiry  falls  logically  into  two  parts:  first,  as  to 
what  extent  these  councils  have  achieved  democratic  industrial 
management;  and  second,  as  to  what  definite  results  have  been 
accomplished  by  reason  of  this  democratic  management. 

I.  The  Extent  to  Which  These  Non-Union  Councils  Have 
Achieved  More  Democratic  Industrial  Management.  One  method 
of  determining  to  what  extent  these  councils  have  achieved  dem- 
ocratic industrial  management  is  by  determining  how  much 
authority  or  power  is  exercised  by  the  workers  through  such 
councils. 

Of  one  hundred  American  non-union  council  plans  which  have 
been  examined,  52%  provide  for  final  arbitration  of  all  matters 
upon  which  the  workers  and  the  management's  representatives 
have  been  unable  to  agree.  While  this  does  not  place  final  au- 
thority and  control  in  the  hands  of  the  workers,  it  does  put  them 
upon  a  more  nearly  equal  footing  with  the  employer,  in  that  the 
workers'  representatives  can  force  any  matter  through  to  final 
settlement  by  some  impartial  arbitration  board  which  has  been 
accepted  by  them. 

Another  14%  of  the  plans  studied  provide  for  final  settlement 
by  a  joint  works  council  of  management  and  men.  In  a  few  of 
these  cases,  a  unanimous  vote,  or  a  majority  vote  within  both  the 

Note:  All  quotations  in  this  chapter  for  which  no  reference  is  given  are 
taken  from  replies  received  in  answer  to  questionnaires  sent  to  over  two  hun- 
dred firms.  It  has  been  necessary  to  omit  reference  to  the  source  of  such  replies. 


503]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  99 

management  and  workers'  groups,  is  necessary.  In  all  cases,  at 
least  a  majority  vote  is  necessary.  No  measure  which  all  of  the 
management  representatives  oppose  may  be  passed.  In  these 
plans  no  provision  is  made  concerning  the  action  taken  if  such 
joint  councils  cannot  agree. 

Thirty-two  percent  of  the  plans  provide  that  in  the  event  the 
joint  works  council  or  the  works  council,  whichever  ranks  the 
higher  in  the  line  of  procedure,  cannot  agree,  or  the  decision  of 
such  a  council  or  committee  is  not  satisfactory  to  the  worker 
or  workers  involved,  final  settlement  is  by  one  of  the  highest 
company  officials  or  a  committee  of  such  officials. 

However,  practically  all  of  the  plans  provide  for  the  following 
regular  procedure  for  all  matters  needing  adjustment:  A  matter 
can  be  initiated  either  by  the  individual  workers,  by  the  joint 
works  council  or  other  representative  bodies,  or  by  the  man- 
agement. There  is  no  limitation  in  any  of  the  plans  studied  as 
to  what  matters  can  be  considered  by  these  representative  bodies. 
Special  committees,  limited  to  certain  subjects,  are  oftentimes 
provided,  but  in  all  the  plants  there  is  some  provision  for  consid- 
eration of  all  possible  matters  needing  adjustment.  Almost  all  the 
plans  provide  that  matters  be  first  presented  by  the  worker  or 
his  representative  to  the  foreman  or  some  other  lower  official. 
This  makes  of  the  worker,  or  his  representative,  and  the  foreman 
the  first  joint  committee  by  which  the  matter  may  be  discussed 
and  settled.  If  no  satisfactory  settlement  is  reached,  it  then  goes 
on  to  the  next  higher  committee  or  council.  Failing  of  settlement 
there,  the  matter  goes  on  to  the  next  higher  body,  and  so  on  up 
to  arbitration  or  the  highest  council  or  company  official.  In  other 
words,  there  are  several  steps  in  the  procedure,  at  any  one  of 
which  final  settlement  may  be  reached,  if  the  required  vote  is 
obtained  and  no  appeal  is  made. 

It  appears  that  in  a  majority  of  these  councils  a  very  large 
step  in  the  direction  of  more  democratic  control  has  been  taken 
by  providing  for  discussion  and  settlement  of  all  matters  by  joint 
bodies  of  management  and  men,  with  final  arbitration  in  case  of 
disagreement. 

In  estimating  the  extent  of  authority  exercised  by  these  plans, 
wherein  no  final  arbitration  is  provided  in  case  of  disagreement 
by  the  joint  bodies,  and  final  decisions  are  made  by  members  of 


ioo    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [504 

the  management,  it  is  important  to  inquire  whether  or  not  such 
ultimate  powers  have  been  exercised  by  such  officials.  Wm. 
Demuth,  president  of  Wm.  Demuth  and  Co.,  in  answer  to  the 
question,  "What  happens  when  the  House  and  Senate  pass  a  bill 
which  is  disapproved  by  the  Cabinet?"  states  that  "no  such 
situation  has  arisen.  The  Cabinet  has  the  power  to  veto,  but  has 
never  exercised  it."1  P.  W.  Litchfield,  of  the  Goodyear  Tire  and 
Rubber  Co.,  reports  that  no  vetoes  have  been  necessary  in  the 
history  of  their  plan.2  B.  C.  Forbes,  who  made  an  extensive  in- 
vestigation of  this  movement,  says  that  he  found  no  cases  where 
it  had  been  necessary  for  an  executive  to  use  the  veto  power.3 
The  Nunn,  Bush,  and  Weldon  Shoe  Co.  reports  that  no  case  has 
as  yet  gone  beyond  the  council.4  Mr.  Stafford,  of  Swift  and  Co., 
Chicago,  reports  the  same  record  in  their  case.  He  also  adds  that 
very  few  cases  ever  reach  the  general  assembly.  William  Basset, 
who  has  organized  many  plans  for  democratic  industrial  manage- 
ment, says: 

"Over  all,  the  executives  should  for  the  present  retain  the 
right  of  veto.  But  I  have  never  known  an  executive  who  found 
it  necessary  to  exercise  the  veto.  Out  of  some  hundreds  of  cases 
of  quasi-democratic  shop  government,  I  have  yet  to  find  a  radical 
measure  that  passed."5 

John  Leitch,  who  has  installed  a  score  or  more  of  council  plans, 
reports  as  follows:  "The  cabinet  is  primarily  an  executive  body. 
It  has  the  power  to  veto,  but  I  have  never  known  that  power  to 
be  exercised."6 

The  same  general  situation  exists  regarding  the  use  of  arbitra- 
tion. There  have  been  discovered  only  a  few  instances  of  resort 
to  arbitration.  A.  H.  Young  says  that  in  all  the  extensive  exper- 
ience of  the  International  Harvester  Co.  with  works  councils  in 
its  twenty-one  plants,  no  case  has  gone  to  arbitration.  The  Col- 
orado Fuel  and  Iron  Co.  has  the  same  record.  The  general  sit- 
uation seems  to  be  that  in  the  practical  working  of  these  plans, 
final  settlement,  either  by  arbitration  or  by  high  company  of- 


r,  H.,  Automotive  Industry,  Vol.  40,  September,  1919,  p.  1208. 
^System,  Vol.  37,  March,  1920,  p.  475. 
'Iron  Age,  Vol.  104,  July  24,  1919,  p.  239. 
*Factory,  Vol.  25,  July  i,  1920,  p.  41. 

"Basset,  Wm.,  When  the  Workmen  Help  You  Manage,  p.  242. 
'Leitch,  John,  Man  to  Man,  p.  141. 


505]  RESULTS  ACCOMPLISHED  BY   NON-UNION   COUNCILS  IOI 

ficials,  occurs  only  in  exceptional  and  very  infrequent  instances. 
It  is  impossible  to  determine  whether  or  not  the  existence  of  such 
provisions  exercises  any  considerable  influence  on  the  nature  of 
the  decisions  reached  by  the  various  representative  bodies.  The 
fact  that  the  case  would  be  referred  to  the  president  or  works 
manager  if  there  had  been  failure  to  settle  it  satisfactorily  in 
the  representative  body  would  not  necessarily  influence  the  work- 
ers in  the  representative  body  to  adopt  a  decision  less  favorable 
to  themselves.  They  might  well  assume  that  their  persistent  de- 
mand for  a  more  favorable  decision  would  have  some  influence 
upon  the  higher  officials. 

The  fact  that  practically  all  matters  considered  by  the  various 
representative  bodies,  whether  joint  council,  joint  committees, 
council,  or  committees  of  workers  only,  are  satisfactorily  settled 
without  reference  to  final  authorities,  seems  to  indicate  that  the 
workers  are  able  to  exercise  a  sufficient  voice  in  control  to  obtain 
reasonably  satisfactory  settlements. 

In  this  connection  it  has  been  suggested  that  the  workers'  repre- 
sentatives in  joint  councils  are  not  capable  of  defending  their  in- 
terests; and  that  the  employer's  representatives,  being  more 
capable  speakers,  are  able  to  dominate  the  meetings  and  persuade 
the  workers  to  accept  settlements  favorable  to  the  company. 
There  is  evidence  that  to  some  extent  such  a  condition  does  exist. 
But  the  fact  that  the  decisions  reached  in  the  many  works  councils 
in  which  the  management  is  not  represented  are  as  generally 
accepted  without  veto  or  interference  by  the  management  as  are 
the  decisions  of  joint  councils,  seems  to  show  that  domination  by 
capable  management  representatives  is  not  a  prevailing  condition. 
It  is  obvious  that  an  important  consideration  in  this  connection 
is  the  grade  of  workman  involved. 

Another  reason  sometimes  given  to  show  that  these  councils  do 
not  give  the  workers  a  real  share  in  industrial  management,  is 
that  the  managers  control  the  elections,  and  have  men  elected  who 
will  be  favorable  to  the  management.  Those  making  such  accu- 
sations have  given  no  specific  evidence,  and  in  the  course  of  this 
investigation  there  has  been  no  discovery  of  evidence  of  such  a 
condition.  That  any  employer  would  expect  to  influence  large 
numbers  of  the  working  men  to  vote  for  a  "company  man"  and 
then  later  expect  those  workers,  or  their  friends,  to  believe  that 


IO2    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [506 

the  elected  council  would  give  them  a  square  deal  is  highly  im- 
probable. On  the  contrary,  employers  have  generally  testified  to 
the  need  of  great  care  to  avoid  giving  the  workers  the  least 
semblance  of  an  excuse  for  claiming  that  the  plan  is  manipulated 
from  above. 

A  more  serious  charge  made  against  works  council  plans  is  that 
the  employers  do  not  present  to  the  employees  honest  data  which 
must  serve  as  a  basis  for  their  decisions  respecting  wages,  hours, 
conditions,  profit-sharing,  production  dividends,  and  similar  im- 
portant matters.  The  Filene  Co.  of  Boston  allows  its  employees 
to  hire  an  expert  accountant  to  go  through  the  concern's  books 
and  learn  for  itself  the  facts  of  its  financial  condition.  The 
Browning  Co.  has  democratic  administration  of  its  profit-sharing 
plan,  which  permits  its  employees  to  verify  to  their  own  satis- 
faction all  statements  regarding  profits.  The  Dutchess  Bleachery 
Co.  in  its  booklet  describing  its  Partnership  Plan,  states  as 
follows : 

"The  final  essential  in  partnership,  knowledge  of  the  affairs  of 
the  company,  is  provided  for  by  providing  the  Board  of  Oper- 
atives with  copies  of  the  audited  monthly  statements  of  the 
company.  These  are  kept  at  the  office  of  the  Board  of  Operatives 
and  may  be  seen  by  any  operator  on  request." 

The  following  extract  from  a  pamphlet  published  by  an  eastern 
firm  shows  a  different  attitude  toward  this  question: 

"While  this  case  was  being  heard,  one  member  proposed  that 
the  board  (joint  works  council)  ask  to  see  the  company's  books. 
He  thought  it  would  help  in  fixing  the  wages  if  the  board  knew 
how  much  the  company  was  making.  Another  employee  said  he 
couldn't  see  how  the  company's  profits  had  anything  to  do  with 
the  wages  of  an  individual. 

"  'Wages  depended,'  he  said,  'not  on  what  the  company  was 
earning,  but  on  the  labor  market.  If  semi-skilled  workmen  were 
doing  a  certain  class  of  work  and  their  wages  were  raised  to  what 
skilled  workmen  were  paid  outside,  what  was  to  keep  the  com- 
pany from  hiring  skilled  workmen?  The  board  did  not  want  to 
get  any  of  the  force  on  such  high  wages  that  it  would  be  an 
economy  to  discharge  them.' 

"There  was  a  good  deal  of  discussion  over  the  question,  but 
this  argument  won.  The  board  decided  not  to  ask  for  the  books." 


507]  RESULTS  ACCOMPLISHED  BY   NON-UNION   COUNCILS  IOJ 

Another  interesting  example  of  the  attitude  of  one  firm  toward 
certain  financial  problems  is  given  in  the  following  extract  from  a 
pamphlet  published  by  the  Illinois  Manufacturers'  Association: 

"A  MEMBER:  May  I  ask  a  question?  In  the  discussion  of  rates 
and  wages  and  pay,  Mr.  Young,  does  the  element  of  what  the 
management  receives  in  the  way  of  compensation  ever  enter  into 
it?  Is  that  made  public  in  the  Council  meetings? 

"MR.  YOUNG:  The  question  arose  only  at  the  adoption  of  the 
Council  plan.  I  remember  how  we  debated  as  to  what  we  would 
say  if  that  question  came  up,  but  it  never  has  come  up  in  three 
years.  They  have  not  asked  what  the  superintendent  got  or  what 
Mr.  Utley  got,  or  anything.  They  have  confined  it  to  mutual  rela- 
tionships in  which  they  have  felt  they  had  a  right  to  participate.  If 
that  question  were  asked,  the  answer  would  be  specific.  We  retain 
unto  the  management  the  executive  power,  and  we  would  per- 
petuate our  management  by  paying  whatever  wages  we  felt  it 
was  necessary  to  pay  to  get  the  men  we  want. 

"THE  MEMBER:  And  that  would  be  no  concern  to  the  Council 
whatever? 

"MR.  YOUNG:    Probably  that  would  be  the  answer."7 

In  the  replies  to  the  questionnaire  sent  out,  only  six  companies 
state  that  they  permit  the  employees  to  verify  their  statements 
respecting  the  profits  of  the  company.  Four  companies  state  that 
their  workers  have  shown  no  desire  to  investigate  the  financial 
secrets  of  the  firm.  The  general  situation  is  that  the  represent- 
ative bodies  are  dependent  upon  the  statements  of  the  manage- 
ment respecting  financial  and  other  inside  business  facts.  This 
must  be  regarded  as  a  possible  point  of  weakness  in  the  majority 
of  the  non-union  employee  representative  plans.  If  the  manage- 
ment desires  to  misinform  the  various  councils  or  committees 
it  is  possible  for  it  to  do  so.  However,  it  is  doubtful  if  this  dif- 
ficulty is  any  greater  for  the  local  council  than  it  is  for  the  unions. 

Another  thing  which  should  be  mentioned  in  this  connection  is 
the  general  ignorance  of  the  employees  respecting  the  intricacies 
of  business  finance  and  other  management  problems.  In  view  of 
the  fact  that  the  workers'  representatives  in  these  representative 
bodies  are  informed  concerning  these  managerial  problems  by  the 

7Some   Experiences  in   Industrial   Cooperation,    an    address   by   Arthur   H. 
Young  at  meeting  of  Illinois  Manufacturers'  Association,  December  13,  1921. 


IO4    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [508 

company  officials,  it  becomes  apparent  that  there  is  great  oppor- 
tunity for  the  management  to  misrepresent  the  exigencies  of  the 
firm,  and  lead  employees  to  a  wrong  conclusion  respecting  the  pos- 
sibilities of  increased  wages  or  shorter  hours,  the  need  of  reduced 
wages,  or  the  firm's  ability  to  improve  working  conditions.  To 
what  extent  employee  representation  plans  are  thus  manipulated 
to  serve  the  ends  of  unscrupulous  employers,  the  outsider  cannot 
easily  determine.  Even  the  government  tax-gatherers  find  it  diffi- 
cult to  learn  the  financial  conditions  of  many  business  concerns. 

However,  there  are  a  great  many  problems  which  are  vitally 
important  to  the  worker,  the  full  understanding  of  which  does  not 
necessitate  a  knowledge  of  managerial  problems  and  of  the 
financial  condition  of  the  company.  The  application  of  wage  rates 
to  individual  workers;  the  question  of  discipline,  including  dis- 
charge and  shop  rules  and  regulations;  the  setting  of  work  stand- 
ards; the  transferring  of  workers;  the  petty  troubles  between  the 
foreman  and  the  worker;  the  whole  problem  of  installing  scien- 
tific management  in  the  plant;  the  regulation  of  piece-rates  to 
avoid  rate  cutting;  promotion;  and  similar  problems  of  great  in- 
terest and  importance  to  the  worker  can  be  considered  intelligent- 
ly by  the  workers  without  dependence  upon  the  management  for 
information.  The  fact  that  the  various  representative  bodies 
reach  a  settlement  in  practically  all  cases  of  this  nature  without 
appeal  to  any  final  authority  indicates  a  very  large  amount  of 
truly  democratic  control. 

A  further  matter  is  that  of  discrimination.  To  what  extent  will 
the  fear  of  discrimination  by  officials  in  their  treatment  of  the 
representatives  deter  these  representatives  from  freely  defending 
their  own  interests  and  the  interests  of  their  fellow  workers?  This 
is  another  one  of  those  questions  which  can  never  be  accurately 
answered.  To  determine  to  what  extent  the  various  represent- 
atives think  about  such  matters  and  to  what  extent  they  are 
influenced  by  such  conditions,  is  impossible.  However,  it  is  quite 
commonly  believed  that  where  the  foreman,  shop  superintendent, 
or  department  head  holds  arbitrary  power  of  discharge  or  of 
promotion,  the  employee  is  very  slow  to  make  either  complaints 
or  suggestions  for  fear  of  offending  such  an  official.  In  most 
American  non-union  council  plans  special  provision  is  made  that 
no  discrimination  shall  be  practiced.  The  following  provision  is 
a  typical  example: 


509]  RESULTS   ACCOMPLISHED  BY   NON-UNION   COUNCILS  IO5 

"It  is  understood  that  every  representative  shall  be  free  to  dis- 
charge his  duties  in  an  independent  manner  without  fear  that  his 
individual  relations  with  the  company  may  be  affected  in  the  least 
degree  by  any  action  taken  by  him  in  good  faith  in  his  represent- 
ative capacity. 

"To  insure  each  representative  his  right  to  independent  action, 
he  shall  have  the  right  to  take  the  question  of  an  alleged  personal 
discrimination  against  him  on  account  of  his  acts  in  his  represent- 
ative capacity  to  the  Director  of  Industrial  Relations  or  to  any  of 
the  superior  operating  officers,  including  the  president  of  the  com- 
pany. 

"Having  exercised  this  right  in  the  consecutive  order  indicated, 
and  failing  a  satisfactory  remedy  within  fifteen  days,  a  represent- 
ative shall  have,  for  the  ensuing  fifteen  days,  the  further  right  of 
appeal  to  the  Secretary  of  Labor  at  Washington."8 

The  fact  which  makes  these  provisions  significant  is  that  under 
most  of  the  plans  all  complaints  of  discrimination  can  be  carried 
through  to  higher  officials  and  to  joint  works  councils  or  works 
councils,  where  investigation  and  impartial  consideration  are  ac- 
corded. This  has  the  effect  of  taking  matters  of  discharge  and 
promotion  out  of  the  hands  of  petty  officials. 

Nevertheless,  the  fear  of  discrimination  constitutes  a  possible 
obstacle  to  the  success  of  joint  council  plans.  The  official  can  find 
ways  and  means  to  injure  any  employee  who  has  incurred  his 
dislike.  This  fact  the  workers  realize.  However,  there  is  no 
evidence  to  show  that  it  is  a  serious  handicap.  The  plans  seem 
to  be  working,  and  the  workers  seem  to  be  using  them  extensive- 
ly. The  natural  result  of  continued  successful  operation  of  such 
plans  will  be  to  lessen  this  obstacle. 

It  must  be  remembered  also  that  the  employees  can  do  much 
harm  to  higher  officers.  "Officials  are  being  chosen  more  and  more 
because  of  their  ability  to  handle  men,"  and  failure  on  the  part 
of  an  official  to  gain  the  good  will  and  cooperation  of  his  men  is 
regarded  unfavorably.  Because  of  this,  the  workers,  have  much 
power  to  discriminate  against  officials,  especially  in  the  represent- 
ative assemblies  where  they  get  the  hearing  of  the  highest  officials. 
This  equality  of  power  between  officials  and  workers  respecting 
discrimination  tends  to  gain  real  democracy. 

'Constitution  of  Standard  Oil  Co.  (Indiana)  plan. 


io6    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [510 

Finally,  the  fact  should  be  noted  that  many  employers  deny 
that  discrimination  is  ever  practiced,  because  to  permit  such  a 
thing  would  be  to  bring  certain  disaster  upon  the  plan.  There  is 
much  truth  in  this  attitude.  These  plans  can  never  be  seriously 
abused,  because  they  cannot  function  without  the  good  will  and 
cooperation  of  the  workers.  On  the  other  hand,  there  seems  to  be 
danger  of  the  management  getting  into  trouble  if  it  does  not  dis- 
criminate against  employee  representatives.  In  the  course  of  this 
investigation,  two  instances  have  been  found  where  employers, 
impressed  with  the  ability  and  good  character  of  employee  rep- 
resentatives, have  promoted  them  to  executive  positions;  where- 
upon the  men  have  accused  the  management  of  robbing  them 
purposely  of  their  most  capable  leaders,  by  making  company  men 
of  them.  The  manager's  task  is  not  always  an  easy  one. 

In  estimating  the  degree  of  real  democratic  industrial  manage- 
ment reached  in  these  council  plans,  it  is  also  significant  to  notice 
what  subjects  have  actually  been  handled. 

The  succeeding  discussion  is  based  upon  the  answers  received 
from  approximately  one  hundred  plans  to  the  request  that  they 
"give  a  complete  list  of  subjects  which  workers'  committees  have 
considered  and  assisted  in  handling."  Some  of  the  answers  were 
in  general  terms.  Four  said,  "All  questions  which  concern  em- 
ployees." Seven  answered  to  the  effect  that  "at  one  time  or 
another  they  have  considered  almost  everything."  One  wrote, 
"Anything  pertaining  to  factory  management."  Another  answered, 
"Works  councils  used  almost  wholly  for  constructive  suggestion." 

The  following  are  examples  of  answers  received: 

"We  endeavor  to  operate  the  plans  from  a  very  broad  and 
liberal  standpoint,  welcoming  for  discussion  any  matter  whatso- 
ever which  may  be  presented  by  the  employees,  and  feeling  free, 
on  the  other  side,  to  present  to  the  shop  representatives  any 
problem  that  may  be  troubling  the  management." 

"Our  council  has  not  been  limited  in  any  way  as  to  matters 
which  it  should  take  up." 

"All  forms  of  welfare  work,  wage  scales  and  piece-rates,  ap- 
plication of  such  scales  or  rates  to  individuals,  labor  turnover, 
production  processes,  business  policies,  unemployment,  stabilizing 


5  1 1  ]  RESULTS  ACCOMPLISHED  BY   NON-UNION   COUNCILS  IO7 

employment,  working  conditions,  hours,  discipline,  wage  reduc- 
tions, reduction  and  increasing  of  working  hours." 

AMERICAN  MULTIGRAPH  Co. 

"Welfare  work,  wage  scales  and  piece-rates,  labor  turnover, 
housing,  election  of  manager,  production  processes,  business 
policies,  unemployment,  working  conditions,  hours,  discipline." 

DUTCHESS  BLEACHERY,  INC. 

"In  the  course  of  a  year  the  cooperative  committees  will  pass 
on  approximately  300  subjects,  which  may  be  grouped  under  the 
following  heads:  welfare  work,  wage  scales,  working  conditions, 
discipline,  uniforms,  purchasing  stock  in  company,  savings  fund, 
pensions."  PHILADELPHIA  RAPID  TRANSIT  Co. 

"During  the  three  or  four  years  of  its  existence  the  subjects  un- 
der consideration  by  the  council  of  our  cooperative  association  have 
been  entirely  too  numerous  to  cover  by  an  answer  to  a  question- 
naire. The  procedure  fills  three  good  sized  minute  books  and  cov- 
ers a  great  range  of  subjects,  including  working  conditions,  hours, 
wages,  on  time  bonus,  management  of  cafeteria  and  dispensary, 
condition  of  the  plant,  athletics,  entertainment,  educational  activ- 
ities, etc."  LEEDS,  NORTHRUP  Co. 

"It  would  be  practically  impossible  to  give  a  complete  list  of 
subjects  which  have  been  handled  jointly  or  by  employee  repre- 
sentatives under  our  industrial  representation  plan.  The  plan 
itself  leaves  the  way  open  for  practically  unlimited  scope  as  to  the 
subjects  of  joint  negotiation.  During  the  more  than  six  years  of 
our  experience,  the  matters  considered  have  included  some  falling 
under  practically  every  imaginable  topic  of  interest  to  the  work- 
man and  the  management.  Naturally,  these  topics  have  included 
wages,  hours  and  working  conditions,  social  and  living  conditions, 
safety,  sanitation,  housing,  medical  treatment,  social  activities, 
efficiency,  unemployment  and  discipline." 

COLORADO  FUEL  AND  IRON  Co. 

"The  matters  which  may  come  before  the  council  are  not  lim- 
ited. Anything  of  importance  to  the  welfare  of  the  Hood  organ- 
ization may  be  brought  up.  H.  P.  HOOD  AND  SONS 


io8    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [512 

In  a  report  sent  by  the  Bethlehem  Steel  Co.  these  facts  are 
given: 

Of  250  cases,  85%  were  settled  in  favor  of  employees.  From 
the  same  number  of  cases  the  following  classifications  were  made: 

Employment  and  working  conditions,  30% 

Wages,  hours  or  work  bonus,  piece-work  and  tonnage  schedules, 
20% 

Health  and  works  sanitation,  10% 

Safety  and  prevention  of  accidents,  10% 

Employees'  transportation,  10%  „ 

Practice  methods  and  economy,  10% 

%%  were  distributed  among  the  following  subjects:  housing; 
domestic  economies  and  living  conditions;  education  and  publica- 
tions; pensions  and  relief;  athletics  and  recreation;  continuous 
employment;  conditions  of  industry. 

The  Standard  Oil  Co.  (New  Jersey)  reports  the  following 
classification  of  119  matters  considered  by  their  joint  works  coun- 
cil: wages,  38%;  working  conditions,  10%;  promotion  and  dis- 
charge, f)%\  hours,  8.5%;  industrial  plan,  8.5%;  housing,  3%; 
sanitation,  3%;  social,  3%;  miscellaneous,  <)%. 

The  following  comparative  tabulation  of  the  subjects  dealt  with 
in  the  Industrial  Cooperative  Relations  meetings  held  during  1919 
and  1920  was  sent  by  the  Bridgeport  Brass  Co.: 

Year  of  1919      Year  of  1920 

Number  of  Number  of 

Persons          Percent  Persons       Percent 

1.  Disability  and  life  insurance. .  32  13  38  17 

2.  Safety  and  sanitation 27  n  23  10.5 

3.  Athletic  and  recreation 76  30.5  80  36.5 

4.  Americanization  and  education  23  9  21  10 

5.  Wages  and  working  conditions  37  15  29  13 

6.  Plant  economies 22  9  21  10 

7.  Miscellaneous 31  12.5  7  3 

8.  Total 248        100  219        100 

Swift  and  Company  have  published  the  following  analysis  of 

cases  handled,  of  the  method  of  handling  them,  and  of  their  final 
disposal:9 

'Capital  and  Labor  Cooperating,  plant  publication  of  Swift  and  Co.,  1922. 


513]  RESULTS  ACCOMPLISHED  BY   NON-UNION  COUNCILS  IOO, 

Analysis  of  Cases 
Accommodations  for  Employees  ..........................  42 

Wage  Adjustments  ......................................   78 

Hours  of  Plant  and  of  large  groups  .......................     8 

Safety  ..................................................   23 

Sanitation  and  Working  Conditions  .......................    57 

Plant  Equipment  ........................................   20 

Dressing  Rooms  .........................................  27 

Disputes  with  Foreman  ..................................  68 

Working  hours,  Adjustments  for  individuals  ................    14 

Restaurant  .............................................    12 

Recreation  ..............................................     4 

Suggestions  for  Improvement  .............................    15 

Disputed  Plant  Rulings  ..................................  48 

Employees'  Benefit  Association  ...........................     3 

Cases  withdrawn  by  Representatives  ......................      I 

Cases  pending  further  investigation  .......................      I 

421 

Method  of  Handling 
Handled  by  Joint  Representatives  in  Voting  Divisions  .......  240 

Handled  by  Committee  on  Rules,  Elections,  and  Procedure  .  .     5 
Handled  by  Committee  on  Interpretations  and  Disputes 

of  Plant  Rulings  ................................  45 

Handled  by  Committee  on  Changes  in  Working  Conditions.  .   33 
Handled  by  Full  Assembly  .......................  ........  94 

Withdrawn  .............................................     3 

Pending  ................................................      I 

421 

Final  Disposal 
In  favor  of  Employees  ..................................  291 

In  favor  of  Management  ................................  126 

Withdrawn  .............................................     3 

Pending  ................................................      I 


In  the  three  plants  of  one  large  company  154  cases  were  pre- 
sented in  four  months.  One  hundred  thirty-two  were  granted  as 
presented.  They  included  cases  of  apprenticeship,  back  pay, 
charity,  deportment,  discharge,  docking  of  pay,  economy,  employ- 
ment, equipment,  health,  holidays,  lighting,  living  conditions, 


no    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [514 

machine  equipment,  overtime,  pay  methods,  pay  time,  piece  work, 
promotion,  quitting  time,  relief,  rules,  safety,  sanitation,  shifts, 
short  pay,  suspension,  termination,  theft,  working  conditions,  time 
clocks,  and  repairs. 

Upon  the  basis  of  all  the  replies  to  the  questionnaire,  and  all 
the  other  material  available,  the  following  summary  has  been 
compiled.  This  summary  indicates  the  subjects  considered  by  the 
works  councils,  and 'the  number  of  different  works  councils  which 
are  known  to  have  considered  each  subject. 

Major  Group 

Grievances — 90.    (This  topic  overlaps  the  others.) 

Working  conditions — 80.  This  includes  sanitation,  accident 
prevention,  all  health  conditions,  ventilation,  lighting,  heat,  and 
orderliness. 

Wages — 75. 

Hours — 75. 

Discipline — 64.  This  includes  suspension,  discharge,  and  mak- 
ing shop  rules. 

Minor  Group 

Recreation — 39.  This  includes  welfare  work,  athletics,  enter- 
tainments, etc. 

Improvements  in  manufacturing  processes — 35.  Reference  is 
made  in  these  replies  to  elimination  of  waste,  tool  improvements, 
new  equipment,  re-routing  materials,  and  inspection  methods. 

Tardiness — 22. 

Absenteeism — 1 8. 

Unemployment — 18. 

Education — 15. 

Cooperative  buying  of  supplies — 14. 

Plant  restaurants — 13. 

Housing  conditions — 12. 

Plant  magazine — 10. 

Assignment  of  work — 10. 

In  addition  to  these  major  and  minor  groups,  the  following 
topics  appear  in  reports  of  council  activities: 

Cooperation  with  civic  agencies  such  as  Y.  M.  C.  A. — 3. 

Employee  representation  plan  in  other  companies — I. 

General  economic  surveys — 3. 

Americanization — 2. 


515]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  III 

Purchase  of  supplies  through  the  company — 2. 

Thrift  and  savings  plan — 4. 

Stock  purchase — 3. 

Relief  for  needy  employees  and  families — 3. 

Street  car  transportation — 3. 

Observance  of  holidays — 7. 

Cost  of  living  statistics — 7. 

General  wage  surveys — 4. 

Volume  and  cost  of  terminations  of  service — I. 

Job  analysis,  and  job  specifications — 4. 

Reinstatement  of  employees — 8. 

Hospitals,  medical  treatment,  dispensary — 4. 

Sick  benefits — 8. 

Pensions — 2. 

Hiring.    (Particular  worker.) — 4. 

Employee's  Guide  Book — i. 

Market  conditions  for  product — I. 

Labor  turnover — 4. 

Classification  of  occupations — 3. 

Payment  of  overtime — I. 

Acquainting  new  employees  with  job,  and  with  provisions  of 
plan  or  representation  by  instruction  through  foreman — I. 

Methods  of  paying  off — 2. 

Adjustment  of  factory  hours  to  accommodate  manufacturing 
schedules — I. 

Disability  and  life  insurance — 3. 

On  time  bonus — i. 

Election  of  manager — i. 

Promotion — 4. 

Reduction  of  wages — 8. 

Vaccination  against  small-pox — i. 

Physical  examination  of  applicants — 8. 

These  statistics  are  not  offered  without  certain  qualifications. 
In  the  first  place,  many  of  the  answers  to  the  questionnaire  have 
been  of  a  very  cursory  nature,  and  quite  evidently  not  based  upon 
any  careful  examination  of  records.  The  tendency  may  have  been 
to  enumerate  certain  more  important  topics  to  the  neglect  of 
many  other  topics  that  were  handled.  The  few  available  digests 
which  analyze  the  character  of  questions  handled  and  which  give 


112    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [516 

the  number  of  times  each  topic  has  been  considered,  indicate  that 
questions  of  the  nature  of  welfare  work,  such  as  education  and 
recreation,  occupy  slightly  more  of  the  time  of  these  committees 
than  the  figures  given  above  would  seem  to  indicate. 

This  summary,  together  with  the  statistics  preceding  it,  is  in- 
dicative of  the  wide  variety  of  topics  dealt  with  by  works  councils, 
and  the  relative  amount  of  attention  given  to  the  various  subjects. 
It  appears  that  there  is  little  significance  in  the  criticism  that  the 
activities  of  these  councils  are  so  diverted  to  welfare  work,  ath- 
letics, and  minor  grievances  that  important  problems  of  industrial 
relations  are  not  considered. 

The  conclusion  that  may  be  reached  is  that,  in  actual  practice, 
these  council  plans  have  afforded  to  the  worker  a  considerable 
share  in  management.  The  wide  variety  of  subjects  dealt  with; 
the  frequent  consideration  of  the  most  important  topics,  such  as 
wages,  hours,  conditions  of  work,  and  discipline;  and  the  fact  that 
satisfactory  agreements  have  been  generally  reached  in  these 
joint  bodies  without  reference  to  final  arbitrators,  seem  to  warrant 
this  conclusion. 

2.  The  Results  of  More  Democratic  Industrial  Management 
Through  Joint  Councils.   The  question  considered  in  this  section 
is:    To  what  extent  has  experience  with  these  non-union  joint 
councils  supported  the  theory,  that  under  more  democratic  in- 
dustrial management  the  workers  will  receive  more  just  treat- 
ment; that  they  will  have  more  confidence  in  the  management; 
and   that   good   will,   cooperation,   and   increased   efficiency   will 
result? 

3.  General  Satisfaction   With   These  Plans.    Most  employers 
have  professed  that  their  reason  for  fostering  employee  represen- 
tation plans  has  been  the  desire  to  gain  the  good  will  and  coopera- 
tion of  their  workers,  as  a  means  to  the  end  of  greater  efficiency 
in  the  utilization  of  the  human  factor  in  industry.    In  the  light 
of  this  professed  desire,  the  testimony  of  these  employers,  to  the 
effect  that  their  democratic  plans  have  been  a  success,  may  be 
offered  as  evidence  that  their  purpose   has  been  accomplished. 
Evidence    of   this    character    is    so    abundant   that   only    a    few 
examples  can  be  given  here. 


517]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  113 

A.  B.  Farquahar  and  Co.  report  respecting  their  council  plan 
that  "the  system  has  so  far  worked  admirably."10 

B.  C.  Forbes  of  the  Forbes  magazine,  who  investigated  a  num- 
ber of  plans,  writes  that  "experience  has  taught  that  the  results 
are  satisfactory  beyond  all  imaginings."11 

One  manager  writes:  "Industrial  strife  from  a  personal  stand- 
point does  not  worry  us  at  all.  While  there  have  been  labor 
troubles  in  the  east,  we  have  gone  serenely  forward  with  our 
work." 

A  letter  received  from  Sidney  Blumenthal  and  Co.  reads:  "In- 
dustrial democracy  has  been  in  continuous  successful  operation 
ever  since.  (It  was  adopted  four  years  ago.)" 

The  following  quotation  was  taken  from  a  letter  from  the 
Cambria  Steel  Co.:  "The  plan  has  been  in  use  with  satisfactory 
results.  It  has  been  helpful  to  both  the  employer  and  to  the  em- 
ployee, in  my  opinion." 

The  General  Electric  Co.  Lynn  Works  report:  "We  wish  to 
state  emphatically  that  our  experience  with  the  shop  committee 
system  has  been  very  satisfactory,  and  we  feel  that  in  this  state- 
ment we  are  upheld  by  the  large  body  of  our  employees.  The 
plan  is  functioning  under  present  conditions  fully  as  well  as  it 
did  during  more  prosperous  times,  and  we  feel  in  this  that  it  has 
passed  through  a  severe  test." 

The  attitude  of  the  Browning  Co.  is  indicated  by  the  following 
statement:  "We  can  hardly  add  anything  to  these  documents, 
except  express  the  utmost  enthusiasm  for  the  plan  that  we  worked 
under  during  the  past  four  years  until  we  closed  down.  The 
moment  we  open  up,  the  old  arrangement  will  be  started  with  the 
same  enthusiasm  and  sincerity." 

In  a  letter  from  the  Dennison  Manufacturing  Co.  this  state- 
ment is  found:  "Altogether  our  experience  with  our  works  com- 
mittee has  been  a  happy  one  and  based  as  it  is  upon  the  recogni- 
tion of  fellowship  between  the  employer  and  the  employee,  has 
been  productive  of  good  will." 

President  E.  E.  Bross  of  Traub  Manufacturing  Co.  states: 
"We  have  found  that  it  not  only  yields  greater  returns  to  every- 

™  Annals  of  the  American  Academy  of  Political  and  Social  Science,  Vol.  XC, 
July,  1920,  p.  100. 

11/ron  Age,  Vol.  104,  July  24,  1919,  p.  239. 


1 14    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [518 

one  concerned  but  that  it  has  brought  about  a  genuine  spirit  of 
cooperation  that  cannot  be  valued  in  terms  of  dollars  and  cents."12 

Wm.  Demuth  writes:  "The  relationship  between  employer  and 
employees  is  the  happiest  it  has  ever  been." 

Another  firm  says :  "Of  greatest  benefit,  we  feel,  is  the  influence 
that  the  plan  has  had  on  employees  by  way  of  improving  their 
morale.  Without  a  high  state  of  morale  among  the  employees,  it 
is  futile  to  talk  of  increasing  production,  reducing  costs,  or  accom- 
plishing anything  else." 

Still  another  firm  reports  as  follows:  "The  chief  benefit  re- 
ceived is  that  we  are  able  to  understand  each  other's  points  of 
view  better  and  are  able  to  explain  our  policy  to  get  the  coopera- 
tion of  the  employees." 

Altogether,  the  favorable  testimony  of  more  than  one  hundred 
firms  has  been  noted  in  the  course  of  this  investigation,  with  only 
here  and  there  an  isolated  note  of  dissatisfaction.  The  conclusion 
seems  warranted  that  these  plans  of  more  democratic  industrial 
management  have  generally  accomplished  the  purpose  of  gaining 
more  good  will  and  cooperation  from  the  workers. 

However,  various  interpretations  may  be  given  to  this  mass  of 
evidence  regarding  the  satisfaction  of  employees  with  the  council 
plans.  As  noted  above,  it  may  be  regarded  as  evidence  that  these 
plans  have  accomplished  the  professed  purpose  of  gaining  in- 
creased good  will,  cooperation,  and  efficiency.  On  the  whole,  such 
a  conclusion  seems  warranted;  nevertheless,  a  question  must  be 
raised  at  this  point.  If  the  employers  are  fostering  works  council 
plans  in  order  to  further  certain  ulterior  aims,  such  as  a  long  run 
adverse  effect  upon  unionism,  their  enthusiastic  praising  of  these 
councils  must  be  correspondingly  discounted. 

There  is  no  direct  evidence  available  to  show  whether  or  not 
more  justice  to  the  workers  has  been  attained  through  these  ex- 
periments in  democratic  industrial  management.  The  fact  that 
the  workers  have  been  better  satisfied  with  conditions,  as  shown 
by  their  improved  spirit  of  good  will  and  cooperation,  may  or  may 
not  be  evidence  that  greater  justice  has  been  attained.  The  value 
of  these  results  as  evidence  of  greater  justice  depends  upon  the 
truth  of  the  assumption  that  this  spirit  of  good  will  and  coopera- 
tion and  resulting  efficiency  would  not  have  appeared  unless  the 

^Factory,  Vol.  25,  p.  538. 


519]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  115 

workers  had  been  treated  more  justly.  Perhaps  this  may  be  ac- 
cepted as  the  general  situation,  but  attention  must  be  called  again 
to  the  fact  that  these  plans  of  more  democratic  industrial  man- 
agement may  be  used  effectively  to  make  the  workers  believe  that 
they  are  getting  justice  when  they  are  not;  and  the  employers 
are  often,  if  they  so  desire,  in  a  position  in  which  they  have  the 
opportunity  to  deceive  the  workers  concerning  the  vital  questions 
of  justice  in  wages,  hours,  conditions,  profits,  and  financial 
policies. 

Reference  must  also  be  made  again  to  those  matters,  the 
handling  of  which  does  not  involve  knowledge  which  the  workers 
do  not  have,  or  cannot  easily  get.  The  satisfactory  settlement  of 
such  matters,  without  reference  to  final  authorities  or  arbitrators, 
constitutes  reasonably  accurate  proof  that  justice  has  been  approx- 
imated. 

4.  Specific  Examples  of  Increased  Efficiency.  The  theory  that 
more  democratic  management  would  bring  increased  efficiency  in 
utilizing  the  human  factor  in  industry,  finds  much  support  in  the 
many  specific  instances  of  increased  efficiency  reported  by  con- 
cerns having  a  council  plan.  A  few  of  the  more  significant  of 
these  specific  examples  are  worthy  of  attention. 

At  this  point  it  is  also  important  to  recall  that  one  of  the 
arguments  advanced  by  proponents  of  more  democratic  industrial 
management  is  that  the  workers  have  much  valuable  knowledge 
of  a  constructive  character  which  can  be  utilized  only  under 
democratic  industrial  management.  The  following  discussion  of 
specific  examples  of  increased  efficiency  afford  much  support  to 
such  an  argument. 

The  officials  of  the  Packard  Piano  Co.  are  enthusiastic  about 
what  they  call  "industrial  democracy."  This  plant  had  failed  in 
an  attempt  to  install  scientific  management.  It  had  a  strike  in 
1912  because  an  efficiency  expert  tried  to  introduce  time  and  mo- 
tion studies.  But  under  a  more  democratic  industrial  manage- 
ment, the  men  have  completely  changed.  They  have  cooperated 
wholeheartedly  in  responding  to  a  financial  incentive  plan,  time 
and  motion  studies,  and  all  possible  phases  of  scientific  manage- 
ment. They  are  becoming  famous  for  their  motto:  "Every  man 
an  efficient  engineer."  This  plant  claims  that  with  168  men  it  is 
now  doing  more  work  than  it  formerly  did  with  268  men,  and  that 


1 16    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [520 

working  hours  have  been  reduced  and  wages  increased  over  100%. 
The  workers  themselves  have  shown  such  an  interest  in  eliminat- 
ing waste  that  they  have  cut  the  cost  of  water  used  in  one  year 
from  $309.91  to  $31.82,  or  a  saving  of  90%.  They  also  saved 
$4656.24  in  one  year  on  the  coal  bill,  having  found  that  two  men 
and  two  boilers  could  be  dispensed  with  in  furnishing  the  power.13 

The  Printz-Biederman  Co.  of  Cleveland  reports  a  production 
of  nearly  50%  in  advance  of  all  previous  records.  A  textile  manu- 
facturing plant  increased  production  over  one-third  within  a  year, 
eliminated  all  overtime  and  Sunday  work,  and  also  cut  the  work- 
ing time  from  ten  to  nine  hours.  On  account  of  the  cooperative 
spirit  of  the  employees,  the  American  Multigraph  Co.  has  in- 
creased production  more  than  40%  over  its  former  standard  for 
a  year.  At  the  Atlantic  Refining  Co.  of  Cleveland,  the  productive 
increase  per  dollar  paid  in  wages  is  represented  by  these  startling 
figures:  April,  18%;  May,  21%;  June,  33^2%;  July,  44%;  and 
August,  74%.  An  Ohio  Steel  fabricating  plant  paid  riveters  37.8 
cents  and  28.3  cents  per  hour  in  April,  1917.  The  record  for  the  as- 
sembly room  then  stood  at  15,017  rivets.  Exactly  four  months 
later  they  were  paying  47.2  cents  and  35.4  cents  respectively  to 
the  same  classes  of  men,  but  the  average  of  rivets  had  risen  to 
18,967. 

Wm.  McKenzie,  president  and  manager  of  the  Crookston  Times 
Printing  Co.,  states  that  there  has  been  a  great  increase  in  the 
volume  of  business  in  his  company.  He  also  adds:  "And  right 
here  it  might  be  mentioned  that  some  of  this  increase  in  volume 
was  due  to  activities  among  the  employees  in  securing  business 
by  personal  solicitation  among  their  friends.  Job  work,  subscrip- 
tions, advertising,  were  picked  up  during  their  idle  hours.  Indeed 
there  has  developed  a  great  deal  of  rivalry  among  the  employees 
in  this  respect  and  the  interest  taken  and  the  pride  exhibited 
when  some  new  business  man  has  been  secured  are  most  gratify- 
ing. They  are  gradually  developing  a  business  sense  which  will 
stand  them  in  good  stead  should  they  ever  go  into  business  for 
themselves."14 

The  White  Motor  Co.  reports  that  since  1914  wages  have  in- 
creased 110%;  but  labor  costs  have  increased  less  than  7%  of  the 

"Leitch,  John,  Man  to  Man,  p.  50. 
"System,  Vol.  37,  April,  1920,  p.  753. 


52 1]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  117 

value  of  the  product.  Materials,  representing  about  52%  of  the 
value  of  the  product,  have  increased  60%  over  the  1914  cost; 
however,  in  spite  of  these  big  advances  in  labor  and  material 
prices,  its  product  has  been  marketed  at  an  advance  of  only 
10%  over  1914  prices. 

J.  M.  Williams  of  the  Fayette  R.  Plumb  Co.,  Philadelphia, 
says  that  working  time  has  been  decreased  17.4%  and  production 
increased  14^  %.15 

The  Browning  Co.  of  Cleveland  makes  the  statement  concern- 
ing production  that  under  an  eight-hour  day  in  1919  it  pro- 
duced 5.4%  more  tons  per  man  per  month  than  in  1918  under  a 
nine-hour  day. 

In  the  Wayne  Knitting  Mills  a  great  increase  in  production  is 
reported.  The  workers  there  have  made  many  valuable  sugges- 
tions as  to  means  of  eliminating  waste,  "raveling  out  of  spoiled 
articles,  and  the  use  of  this  thread  later  in  weaving;  the  salvage 
of  the  thread  at  the  bottom  of  the  spool  which  used  to  be  thrown 
away;  the  saving  of  steps  by  a  change  in  the  position  of  the  box 
holding  the  spools;  and  similar  economies." 

The  following  extract  from  material  distributed  by  the  American 
Multigraph  Co.  among  the  men  in  its  shops  is  highly  suggestive  of 
the  possibilities  of  democratic  industrial  management. 

"The  work  of  the  Committee  on  Economies,  Suggestions,  and 
Improvements  in  our  Product  has  proved  to  be  one  of  the  most 
important  of  the  Multigraph  Congress.  It  has  collected  and 
passed  judgment  on  hundreds  of  suggestions  that  were  turned 
in  by  the  employees.  Cash  awards  are  made  for  all  suggestions 
adopted.  When  suggestions  are  rejected,  they  are  returned  by 
this  committee  with  a  note  of  explanation  as  to  the  reason.  A 
new  suggestion  box  system  has  been  installed  by  this  committee. 
Standards  for  the  payment  of  awards  have  been  established 
which  make  it  worth  while  for  you  to  keep  your  eyes  open  and 
make  suggestions.  This  committee  works  in  connection  with  the 
Engineering  Department,  Production  Department,  and  other 
Congressional  committees. 

"The  Committee  on  Production  Control  has  assisted  in  the 
enormous  undertaking  of  increasing  efficiency  accompanied  with 

"Williams,  J.  M.,  dnnals  of  American  Academy  of  Political  and  Social  Sci- 
ence, Vol.  XC,  July,  1920,  p.  105. 


1 1 8    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [522 

increased  earnings  to  the  employees  and  the  management.  Pro- 
duction has  been  followed  very  closely  by  this  group.  It  has 
suggested  many  improvements  to  the  Production  Department. 
This  information  was  obtained  by  following  our  product  through 
the  manufacturing  processes.  Machine  congestion  has  been  in- 
vestigated and  recommendations  offered  to  the  Maintenance  De- 
partment as  to  improvements.  Advisory  boards  have  been  sug- 
gested as  a  means  of  improving  production  problems.  This  com- 
mittee has  worked  unceasingly  to  the  interests  of  the  employees 
regarding  improvements  in  their  working  conditions. 

"The  Committee  on  Time  and  Motion  Study  is  composed  of 
expert  men  capable  of  passing  judgment  on  the  big  problems 
affecting  the  duties  of  machine  operators  and  other  help.  It 
has  assisted  the  Production  Department  in  timing  and  rating 
over  1,100  operations.  Employees  have  not  complained  in  any 
instance  as  to  the  prices  set  being  too  low.  This  committee  guar- 
antees your  piece  work  rate  to  be  fair  and  high  enough  for  you 
to  make  big  money  on.  The  chief  aim  of  this  committee  is  to 
benefit  the  employees  by  reducing  fatigue  and  increasing  earnings. 
The  actual  result  from  its  work  is  the  satisfaction  displayed 
by  the  workmen  about  the  earnings  they  now  receive. 

"The  Committee  on  Spoiled  Work  digs  in  and  gets  to  the  seat 
of  the  trouble.  Realizing  the  connection  that  spoiled  work  has  to 
do  with  furthering  the  other  congressional  interests,  immediate 
results  are  always  obtained.  The  workmen  are  instructed  as  to 
the  handicap  resulting  from  spoiled  work.  The  scrap  reduction 
in  the  plant  has  been  very  noticeable  through  the  excellent  help 
from  this  committee. 

"Through  records  obtained  by  the  Committee  on  Attendance 
and  Tardiness,  information  is  at  hand  showing  the  efficiency 
lost  by  employees  being  absent  or  tardy.  After  pay  day,  ab- 
senteeism has  been  closely  checked  and  recommendations  offered 
where  chronic  absentees  were  concerned.  Personal  investigations 
have  been  conducted  by  this  group,  and  great  cooperation  extend- 
ed to  department  heads  in  establishing  better  conditions.  Its 
aim  is  to  prevent  loss  of  time  which  is  harmful  to  bigger  Congres- 
sional workings.  The  absentee  habit  is  not  tolerated  in  this  plant. 

"Communication  has  been  kept  up  between  the  factory  and 
sales  field  concerning  matters  of  the  sale  of  the  multigraph. 


523]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  119 

Many  matters  usually  referred  to  Service  Departments  have  been 
looked  after  by  the  Committee  on  Sales  Cooperation.  Manu- 
factured parts  of  inferior  quality  have  been  traced  back  and  the 
source  of  trouble  found  and  corrected.  This  has  proved  a  great 
help  to  the  user  in  the  field.  It  has  also  been  productive  of  a 
better  and  closer  relationship  between  the  Production  and  Sales 
Departments. 

"When  the  Special  Eight  Hour  Committee  undertook  to  reduce 
the  working  hours  of  this  plant  (we  were  then  a  ten-hour  shop), 
it  was  confronted  with  the  biggest  problem  of  the  day — reduction 
in  hours  with  increase  in  production  was  the  undertaking.  A 
detailed  analysis  was  made  of  the  situation.  The  committee  in- 
vestigated production  methods  from  all  angles.  This  included 
sources  of  supply,  production  control,  machine  production, 
assembly,  and  distribution.  After  the  management  had  accepted 
suggestions  from  this  committee  as  to  production  improvements — 
production  quotas  were  set  for  a  monthly  out-put  with  the  belief 
that  as  much  work  could  be  performed  in  nine  hours  as  was  being 
done  in  ten,  and  at  less  expense — the  employees  produced  the 
required  quotas.  As  soon  as  quotas  were  made,  the  Senate  voted 
that  the  plant  accept  the  Congress  recommendation  that  a  nine- 
hour  working  day  be  initiated  as  a  basis  of  determining  the  possi- 
bilities of  a  future  eight-hour  day.  This  was  done  with  the  same 
daily  wage  applying  as  was  received  for  the  ten-hour  working  day. 
With  this  change  in  hours  came  increased  production  at  less  ex- 
pense. This  was  shown  by  the  Congressional  Committee  on  Eight 
Hours  in  its  final  investigation.  This  committee  has  unceasingly 
shown  the  employees  and  management  the  value  of  cooperation 
in  all  matters  regarding  the  manufacturing  of  our  product.  This 
work  has  been  of  great  help  to  the  Company  in  bettering  condi- 
tions for  the  employees  who  at  all  times  reap  the  benefits  of  the 
constructive  workings  of  Congress."16 

5.  Wages.  Many  firms  testify  to  the  value  of  joint  considera- 
tion and  determination  of  wage  rates.  The  general  thought  in 
these  replies  is  that  it  has  been  found  that  mutually  satisfactory 
rates  can  be  arrived  at  more  quickly,  and  that  increased  efficiency 
results  from  the  good  will  that  has  been  gained  by  working  out 
wage  scales  under  this  plan. 

wWhat  Congress  is  Doing,  American  Multigraph  Co.  plant  publication. 


I2O    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [524 

One  firm  reports  that  it  is  no  longer  worried  by  wage 
disputes.  "All  matters  of  wages  are  left  to  the  committee  and 
its  recommendations  are  carried  out.  We  know  that  it  is  not  going 
to  recommend  a  raise  for  a  man  who  does  not  deserve  it."  It 
cites  an  example  of  this.  "One  employee  became  dissatisfied.  He 
claimed  that  the  workers  at  his  trade  made  more  elsewhere.  The 
committee  investigated  and  found  that  he  was  working  only 
thirty-three  hours  a  week  instead  of  the  usual  forty-four.  They 
advised  him  to  work  steadily  for  a  month,  and  see  what  he  made, 
and  then  they  would  adjust  matters.  He  failed  to  do  so,  and  they 
advised  him  to  seek  work  elsewhere." 

Eugene  B.  Clark,  president  of  the  Clark  Equipment  Co.,  states 
that  their  council  deals  with  many  wage  adjustments;  but  that 
they  are  based  upon  "careful  day  to  day  investigation  of  individ- 
ual jobs,  and  concern  slightly  different  premium  rates.  The  gener- 
al trend  is  to  give  the  men  more  money.  However,  there  is 
nothing  radical  about  them.  When  the  men  themselves  help  to 
make  the  rates,  they  give  careful  attention  to  the  grading  of  rates 
according  to  the  worth  of  the  man."17 

Mr.  A.  B.  Rich  of  the  Dennison  Manufacturing  Co.  says  that 
in  analyzing,  grading,  and  valuing  operations,  "this  company  has 
felt  the  need  of  the  advice  and  criticism  that  its  employees  may 
give  the  management,  and  in  consequence,  for  the  last  few  years 
the  employees  have  elected  a  works  committee  under  rules  and 
by-laws  drawn  up  by  a  committee  of  the  employees  (which  rules 
and  by-laws  were  accepted  by  the  management  without  alter- 
ation). The  works  committee,  as  will  be  noted  hereafter,  is  always 
a  potential  and  often  an  active  factor  in  the  determination  of 
wages.  Furthermore,  the  presence  within  the  organization  of  a 
works  committee  whose  responsibility  it  is  to  see  that  the  em- 
ployees, individually  and  as  a  whole,  have  a  share  in  manage- 
ment, is  evidence  of  the  spirit  of  the  company  and  of  the  reputa- 
tion it  has  in  the  eyes  of  applicants  for  employment. 

"In  setting  the  wages  for  the  different  classes  of  work,  it  has 
been  found  to  be  a  good  plan  to  begin  with  the  simplest  types  of 
work  and  make  up  rates  for  these  first,  and  then  advance,  pro- 
gressively, to  the  more  difficult  jobs. 

*7 System,  Vol.  36,  December,  1919,  p.  1079. 


525]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  121 

"So  far,  a  final  unanimity  has  always  been  arrived  at  before 
taking  any  further  steps  in  making  up  a  classification.  In  every 
case  where  a  general  modification  of  wages  has  been  made,  it 
has  first  been  submitted  to  the  works  committee  for  its  approval 
or  criticism. 

"At  this  conference,  a  considerable  amount  of  criticism  is  usu- 
ally forthcoming,  and  many  helpful  suggestions  are  made  which 
tend  to  improve  the  classification  and  more  clearly  distinguish  the 
different  types  of  jobs. 

"The  works  committee  has  in  the  past  appointed  a  sub- 
committee to  study  the  wage  classifications,  and  has  itself 
compared  them  with  the  'going  rates'  of  wages  as  they  have  ap- 
peared in  the  publications  that  the  management  used;  and  as  far 
as  it  has  been  able  to,  it  has  checked  them  up  from  per- 
sonal knowledge  or  investigation.  With  comparatively  few  minor 
changes,  the  basis  for  wages  outlined  have  been  accepted."18 

In  1921,  this  company  desired  to  reduce  wages.  It  proposed 
this  to  the  works  committee  and  invited  its  cooperation  by  the 
following  communication: 

"Just  how  this  can  best  be  brought  about  we  do  not  know.  It 
is  something  that  must  be  carefully  worked  out  and  applied 
sufficiently  slowly  so  that  it  can  be  done  with  accuracy  and  fair- 
ness. The  management  is  working  now  on  plans  to  carry  out 
this  general  policy,  which  it  will  submit  to  the  works  committee 
when  completed,  and  will  be  glad  to  have  the  works  committee, 
either  directly  or  through  a  subcommittee,  work  on  the  same 
problem  and  propose  plans  for  the  execution  of  these  policies,  or 
make  suggestions  in  regard  to  their  execution."10 

A  conference  committee,  representing  both  the  management 
and  the  works  committee,  was  created.  This  committee  then 
drew  up  plans  by  which  the  adjustment  was  accomplished.  "The 
starting  wages,  or  minimum  and  standard  wages,  were  in  practi- 
cally all  cases  reduced  to  conform  more  nearly  with  general  wage 
levels.  Maximum  rates  were  maintained.  Individual  re-rating 
with  the  new  wage  rates  for  basis  was  carried  out  within  six 
weeks,  and  although  all  had  the  privilege  of  questioning  their 

"The  Annals  of  the  American  Academy  of  Political  and  Social  Science,  Vol. 
C,  March,  1922,  pp.  20,  22,  24. 
"Ibid. 


122    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [526 

final  rating,  either  directly  or  through  the  works  committee,  only 
fourteen  out  of  2,500  raised  any  question  in  regard  to  their  stand- 
ing after  the  readjustment."20 

The  following  passage  is  from  material  distributed  by  the 
American  Multigraph  Co.: 

"Wage  scales  for  every  kind  and  grade  of  work,  both  manu- 
facturing and  office  help,  have  been  classified  and  rated  by  the 
Committee  on  Wages,  Rates,  and  Compensation.  These  ratings 
were  all  based  on  the  ability  of  the  individual  and  the  quality 
and  quantity  of  work  produced.  All  help  is  classified  under  first, 
second,  and  third  class  gradings  with  a  minimum  and  maximum 
wage  applying  to  each  classification.  Every  employee  has  the  op- 
portunity of  receiving  higher  wages  by  his  progressing  from  the 
grade  to  which  he  was  originally  classed  to  the  next  higher 
step.  As  soon  as  you  show  yourself  to  be  worth  more,  you  get  it. 
The  wages  set  by  this  committee  were  established  as  standard  by 
investigations  conducted  on  the  outside." 

Mr.  Frank  J.  Becvar,  production  superintendent  of  the  Cloth- 
craft  Shops  of  the  Joseph  Feiss  Company,  in  discussing  their 
experience  with  rate  fixing,  makes  the  following  statements: 

"Any  plans  of  wage-rate  determination  must,  in  order  to  be 
satisfactory,  satisfy  the  workers  affected  on  two  questions  that 
they  raise  either  explicitly  or  unconsciously,  viz:  (i)  Are  the 
earning  rates  sufficient?  (2)  Are  the  various  rates  fair,  relatively, 
one  to  another?  The  question  of  sufficiency  refers  not  merely  to 
what  is  needed  for  living  but  to  other  rates  for  the  same  grade  of 
work  in  the  community.  The  question  of  fairness  involves  such 
ideas  as  'equal  pay  for  equal  work/  'more  pay  for  harder  work,' 
and  the  like.  We  believe  that  our  method  of  determining  and 
adjusting  wage  rates  yields  satisfactory  answers  to  these  ques- 
tions. 

"Particularly  is  this  true  because  we  do  not  impose  any  de- 
termination or  adjustment  by  arbitrary  methods.  We  systemat- 
ically review  our  classifications  four  times  a  year.  We  consider 
every  operation  and  maintain  or  advance  its  class  according  to 
careful  weighing  of  its  contents.  We  drop  an  operation  to  a 
lower  class  whenever  the  operation  itself  has  been  changed  so  as 
to  include  a  smaller  proportion  of  the  more  difficult  and  valuable 


527]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  123 

work  elements.  We  submit  to  a  wage  committee  and  to  the 
operatives  affected  our  revisions  with  our  reasons  in  advance  of 
the  pay  period  in  which  they  are  to  go  into  effect;  this  gives  the 
operatives  time  and  opportunity  to  consider  them  and  protest  if 
they  deem  the  revision  wrong.  Any  such  differences  of  opinion 
are  carefully  threshed  out  with  the  employees  through  their 
representative  and  the  Employees'  Council.  Lowering  the  class 
of  an  operation  occurs  with  great  infrequency.  When  this  is  done, 
opportunity  is  sought  to  advance  the  operatives  so  affected,  to  a 
higher  class,  so  that  their  earnings  will  not  suffer.  We  have  never 
yet  been  able  to  man  fully  the  operations  in  our  highest  classes."21 

One  of  the  chief  forms  of  testimony  received  respecting  the 
success  of  works  council  plans  has  been  that,  in  periods  of  de- 
pression when  retrenchment  became  necessary,  the  employees 
have  been  fair  and  reasonable,  and  have  adopted  wage  reductions 
without  interruptions  in  work. 

A.  H.  Young,  manager  of  the  Industrial  Relations  Department 
of  the  International  Harvester  Co.,  states  that  two  reductions  of 
wages  have  been  adopted  by  their  works  council;  one  of  20%, 
and  one  of  i2l/2%.  In  both  cases  there  was  almost  unanimous 
consent.22 

The  following  extract  from  a  pamphlet  published  by  the 
American  Multigraph  Co.  describes  its  committees'  activities 
during  a  period  of  depression: 

"The  real  measure  of  the  worth  of  an  employees'  congress, 
however,  is  found  not  in  what  it  does  when  times  are  good,  but 
rather  in  its  record  during  a  period  of  depression.  Many  in- 
dustrial democracies  were  born  during  the  war  period  on  a  rising 
labor  market,  when  conditions  were  most  favorable  to  their  suc- 
cess. The  great  test,  however,  is  now  in  progress,  and  many  man- 
agers are  awaiting  its  results  with  keen  interest. 

"It  was  to  be  expected  that  any  organization  of  employees 
would  vote  for,  and  accept  gracefully,  any  measure  that  increased 
wages  or  reduced  working  hours  without  loss  to  the  workers;  but 
how  would  such  an  organization  react  when  economic  conditions 
made  retrenchment  necessary?  That  was  the  question. 

"Ibid.,  pp.  17,  18. 

"Pamphlet  by  the  Illinois  Manufacturing  Association. 


124    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [528 

"Our  Employees'  Congress  answered  this  question  in  a  very 
fair  and  satisfactory  manner.  It  became  necessary  for  us  to  re- 
duce the  hours  of  work  from  six  days  a  week,  44^  hours  working 
time,  to  five  days  a  week,  40  hours  working  time,  and  to  reduce 
the  force  by  about  20%.  Each  of  these  moves  was  made  after  a 
committee  of  the  Employees'  Congress  had  gone  into  the  matter 
thoroughly  and  concurred  with  the  management  in  the  course 
taken. 

"In  the  case  of  the  men  laid  off,  three  lists  were  prepared — 
one  list  from  the  production  records  of  the  company,  one  list  from 
the  general  impression  of  the  foreman,  and  another  list  prepared 
by  the  Wage  and  Rates  Committee  which,  then  meeting  jointly 
with  the  management,  discussed  each  individual  name  and  why 
it  did,  or  did  not,  belong  to  the  lay-off  list.  In  this  way  we  have 
accomplished  a  shrinkage  and  the  men  themselves  were  able  to 
suggest  just  who  should  or  should  not  be  affected. 

"A  further  retrenchment  becoming  necessary,  a  committee 
from  Congress  was  called  into  conference  with  the  Cabinet  and 
presented  with  facts  and  figures  pertaining  to  relationship  of  pro- 
duction and  sales.  After  a  full  discussion  and  study  of  the  facts 
presented,  the  committee  made  a  brief  investigation  of  inventories 
of  raw  and  process  material  and  finished  stock  which,  as  shown, 
were  increasing  to  a  point  that  was  causing  us  to  borrow  large 
amounts  of  money  to  finance.  This  committee  then  reported  its 
findings  to  Congress,  which  in  substance  were  that  in  justice  to 
the  owners  of  the  company  the  only  recommendation  they  could 
make  was  a  complete  shut-down  of  the  plant  until  such  a  time  as 
the  abnormal  inventories  could  be  sold. 

"Upon  receipt  of  this  report  by  Congress  it  was  approved  and 
passed  on  to  the  Cabinet.  The  Cabinet  in  turn  offered  the  alter- 
native of  a  three  day  week  without  change  of  hourly  rates,  with 
the  thought  of  maintaining  as  much  of  the  organization  as 
possible.  This  was,  in  turn,  approved  by  Congress  and  put  into 
effect. 

"The  value  of  handling  a  matter  in  this  way  cannot  be  over- 
estimated. The  investigations  and  reports  of  workmen  carry 
weight  with  their  co-workers  and  stimulate  confidence  in  the  man- 
agement. The  men  realized  they  were  getting  the  best  deal 
possible  under  the  existing  circumstances. 


529]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  125 

"Statements  of  manufacturing  costs  were  given  with  figures 
showing  increase  or  decrease  of  hours  necessary  to  produce  our 
different  products.  Also  the  percentage  of  hourly  increase  in 
wages,  increase  in  raw  material  and  overhead  spread  over  a  term 
of  six  years  —  in  fact,  all  possible  information  regarding  the  oper- 
ation of  the  company's  business  was  given  to  Congress  for  in- 
vestigation. The  best  available  figures  showing  reduction  in  living 
costs  in  Cleveland  were  given  to  the  men,  all  of  which  showed  the 
justice  and  necessity  of  reducing  hourly  rates. 

"It  was  finally  recommended  by  the  Cabinet  to  Congress  that 
the  Company  change  from  a  three  day  week  to  full  time  basis 
of  44  YI  hours  per  week,  with  an  average  wage  reduction  of  20%. 
It  was  found  from  cost  figures  that  the  three  day  week  was  an 
uneconomic  basis  of  operation  due  to  the  high,  fixed  overhead 
which  could  be  eliminated.  Also  on  the  three  day  week  the  men 
were  earning  a  weekly  rate  of  slightly  over  50%  of  their  full  time 
rate,  whereas  by  working  the  full  time  with  a  20%  cut  their 
weekly  pay  would  amount  to  considerable  more. 

"The  Wages  and  Rates  Committee  obtained  all  information 
needed  for  re-classifying  the  men  according  to  efficiency  and 
length  of  service.  The  Committee  then  established  classifications 
for  the  work  being  performed.  The  worker's  individual  case  was 
then  taken  up  and  all  workers  were  placed  in  classifications  ac- 
cording to  rating  made.  Length  of  service  automatically  de- 
termined how  near  the  maximum  rate  the  worker  would  be 
paid."23 

The  William  Demuth  Co.  closed  its  factory  in  Richmond^ 
Hill  before  Christmas  and  opened  it  again  January  i,  with  35% 
of  the  normal  force  on  the  pay  roll.  The  president  of  the  com- 
pany went  before  the  House  of  Representatives  telling  it  that 
if  he  continued  running  up  a  weekly  deficit,  the  plant  would  be 
forced  to  close  down;  thereupon  the  House  of  Representatives  re- 
duced the  income  of  the  piece-workers  20%,  and  day-workers, 
10%.  The  president  said  he  would  restore  the  income  as  soon  as 
business  warranted  it. 

The  Bridgeport  Brass  Co.  had  only  half  of  its  force  working 
half  the  time.  The  general  manager  went  before  the  council  of 


Our  Men  Govern  Themselves,  plant  publication  of  American  Multi- 
graph  Co. 


126     WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT 

workers,  and  told  it  that  there  was  no  business  and  money  was 
tight.  He  asked  the  workers  what  solution  they  would  propose: 
whereupon  they  immediately  drew  up  the  proposal  of  a  horizontal 
wage  reduction  of  10%,  revision  of  all  pay  preferential  classifica- 
tions, and  abolishment  of  all  overtime  pay. 

In  many  cases  wage  reductions  have  been  voted  as  a  means  to 
prevent  a  further  shut-down  of  the  plant,  which  would  necessitate 
unemployment  and  no  wages  to  the  workers.  By  some,  these 
cases  have  been  regarded  as  proof  that  the  employers  really  do 
possess  the  power  to  control  wages,  and  that  the  employees  are 
at  their  mercy  in  these  plans  of  so-called  democratic  industrial 
management.  Nevertheless,  the  fact  that  these  plants  had  shut 
down  temporarily,  had  partially  shut  down,  or  had  offered  the 
workers  their  choice  of  part  time  work  or  reduced  wages,  seems 
to  indicate  that  retrenchments  were  necessary. 

6.  Reduced  Labor  Turnover.  In  the  questionnaire  sent  out, 
the  question  was  asked,  "What  definite  facts  can  you  mention  as 
evidence  that  your  plan  has  helped  increase  efficiency?"  Thirty- 
two  firms  reported  a  reduction  in  labor  turnover.  One  firm  stated 
that  its  labor  turnover  had  been  reduced  50%  in  the  year  and 
a  half  it  had  had  a  joint  council  plan  in  operation.  Another 
firm,  whose  industry  is  highly  seasonal  and  which  employs  mostly 
unmarried  women  among  whom  labor  turnover  is  generally  high, 
cited  the  following  low  percent  of  labor  turnover  for  eleven 
months  beginning  December,  1920: 

.0889  .0336  .0522 

.0889  .0462  -0358 

.0159  .0739  .0317 

.0074  .0440 

A  third  firm  reported  its  labor  turnover  in  1919  to  have  been 
49%;  in  1920,  33%;  and  in  1921,  1^/2%.  Its  joint  council  plan 
was  adopted  in  the  latter  part  of  1919. 

A  fourth  firm  states,  "Due,  we  believe,  to  the  spirit  of  plant 
loyalty,  which  has  developed,  our  labor  turnover  has  been  cut 
in  half." 

A  fifth  one  writes,  "By  means  of  our  plan  of  industrial  de- 
mocracy, we  have  been  able  to  get  the  employee  thoroughly  inter- 
ested in  our  financial  incentive  plan;  and  in  order  to  increase  their 
share  in  dividends,  they  have  influenced  many  workers  to  change 
their  minds  about  leaving  our  employ." 


53  I  ]  RESULTS   ACCOMPLISHED  BY   NON-UNION  COUNCILS  I2/ 

Another  writes:  "Labor  turnover  is  partly  due  to  unimportant 
disputes  between  men  and  foremen.  By  eliminating  these,  our 
plan  has  reduced  labor  turnover." 

The  Browning  Co.  of  Cleveland,  Ohio  reports  a  tfl/2%  reduction 
in  labor  turnover  in  one  year.  Wm.  Demuth  of  Demuth  and  Co. 
in  answer  to  the  question:  "What  effect  has  democratic  industrial 
government  had  on  labor  turnover?"  states  that  in  their  plant 
labor  turnover  has  "gone  down  until  it  is  no  longer  a  serious 
factor."2*  He  reports  further  that  the  workers  have  persuaded  the 
others  to  stay,  in  order  not  to  reduce  efficiency.  The  Virginia 
Bridge  and  Iron  Co.  says  that  it  can  clearly  see  that  its  council 
plan  "reduces  labor  turnover  and  loss  of  time  among  the  em- 
ployees." William  McKenzie,  president  and  manager  of  the 
Crookston  Times  Printing  Co.,  makes  the  statement  that  not  a 
man  has  quit  since  their  plan  of  democratic  industrial  manage- 
ment was  adopted;  and  that  the  men  filled  the  vacancies  that 
already  existed  by  bringing  in  their  friends.25 

Closely  related  to  the  problem  of  labor  turnover,  is  the  problem 
of  recruiting  an  efficient  and  plentiful  supply  of  labor.  One  large 
clothing  manufacturing  concern  says  that  its  plan  of  democratic 
industrial  management  has  solved  its  formerly  bothersome 
problem  of  labor  supply.  This  plant  has  made  a  careful  survey 
of  the  causes  leading  people  to  apply  to  its  plant  for  employ- 
ment. It  states  that  the  second  largest  group  in  the  classifica- 
tion made  was  of  those  who  applied  on  account  of  the  reputation 
of  the  plant  for  fair  dealing.  "Former  employees  and  present 

employees  all  spread  the  report  that  the  shops  are  a 

good  place  in  which  to  work.  Statistics  show  that  many  apply 
many  times  for  employment,  which  shows  how  they  regard  its 
character.  One  woman  applied  seven  times.  Too,  those  applying 
for  work  are  of  the  very  best  type,  which  is  a  very  important  con- 
sideration." 

John  Leitch  says  that  one  factory,  requiring  skilled  labor,  no 
longer  worries  over  a  supply  of  labor.  "That  factory  formerly 
could  hardly  get  its  complement;  now  with  labor  even  scarcer,  it 
has  a  waiting  list."26 

"Factory,  Vol.  23,  September,  1919,  p.  502. 
"System,  Vol.  37,  April,  1920,  p.  753. 
"Leitch,  John,  Man  to  Man,  p.  91. 


128    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [532 

Of  course,  it  is  impossible  to  determine  the  precise  amount  of 
reduced  labor  turnover  which  is  due  to  the  successful  operation 
of  an  employee  representation  plan.  Nevertheless,  the  large 
number  of  firms  reporting  reduced  labor  turnover;  the  substantial 
character  of  the  reductions;  the  fact  that  they  have  developed 
simultaneously  with  the  growth  of  the  employee  representation 
plans;  and  the  absence  of  other  major  causes  to  which  the  change 
could  be  ascribed,  seem  to  warrant  the  conclusion  that  a  more 
democratic  type  of  industrial  management  constitutes  a  partial 
solution  to  the  problem  of  labor  turnover. 

7.  Discipline.  There  is  practically  unanimous  agreement  among 
concerns  having  employee  representation  plans,  that  the  problem 
of  discipline  is  becoming  less  difficult.    Almost  all  existing  plans 
provide  for  the  handling  of  matters  of  discipline  by  joint  bodies. 
Out  of  the  many  plans  observed  there  have  been  noted  only  a 
few  isolated  instances  of  dissatisfaction  on  the  part  of  the  manage- 
ment  with    the    manner    in    which    matters    of    discipline    were 
handled.   Results  seem  to  bear  out  fully  the  theory  that  men  will 
obey    rules    voluntarily    adopted,    better    than    rules    arbitrarily 
imposed,   and  will   prove   strict  disciplinarians   when   given  the 
responsibility.  E.  E.  Bross,  president  of  the  Traub  Manufacturing 
Co.,  states  that  democratic  control  in  matters  of  discipline  has 
proved  a  thorough  success,  and  that  the  men  "are  sometimes 
even  a  little  too  strict.  We  have  felt  at  times  impelled  to  ask  them 
to  modify  their  decisions."27 

8.  Grievances.    It  has  been  sometimes  suggested  that  the  only 
value  of  the  average  council  plan  is  that  it  creates  a  new  system 
of  settling  grievances.    Those  who  have  held  this  opinion  have 
seemed  to  feel  that  these  works  councils,  being  only  a  new  way 
for  settling  grievances,  were,  therefore,  of  little  significance  and 
not  at  all  worthy  of  having  the  adjective,  "democratic,"  applied 
to  them.  Careful  consideration  shows  not  only  that  the  settlement 
of  grievances  is  but  one  of  the  many  important  activities  of  the 
typical  works  council,  but  also  that  the  settlement  of  grievances  is 
such  an  important  and  complex  matter  that,  if  true  democratic 
machinery  is  set  up  for  the  settling  of  all  grievances,  a  very  large 
step   has  been  taken   in  the   direction  of  democratic   industrial 
management. 

"Factory,  Vol.  25,  August  15,  1920,  p.  538. 


533]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  129 

As  a  rule,  the  constitutions  of  the  various  council  plans  provide 
that  any  grievances  or  any  matter  needing  adjustment  can  be 
carried  to  the  council  if  not  satisfactorily  settled  by  conference 
with  the  foreman  or  some  other  designated  petty  official.  The 
significance  of  this  provision  lies  in  the  fact  that  there  are  prac- 
tically no  limitations  in  the  typical  works  council  constitution  con- 
cerning what  grievances  a  workman  or  a  group  of  workmen  may 
present.  The  way  is  left  open  for  any  worker  or  group  of  workers 
to  present  a  grievance  to  their  foreman  concerning  any  subject 
from  shop  rules  to  company  profits.  By  refusing  to  accept  the 
foreman's  decisions,  they  can  carry  the  discussions  of  that  subject 
to  the  council,  and  in  the  majority  of  the  plans  from  there  to 
arbitration. 

Moreover,  the  majority  of  grievances  involve  such  vital  sub- 
jects as:  shop  rules  and  regulations,  discipline,  wages,  piece- 
rates,  hours,  scientific  management  schemes,  promotion,  discharge, 
suspension,  fines,  working  conditions,  and  unfair  treatment  by 
officials.  These  are  not  trivial  matters;  they  are  the  very  essence 
of  industrial  management  so  far  as  the  worker  is  concerned.  It  is, 
therefore,  a  long  and  significant  step  in  the  direction  of  more 
democratic  industrial  management  when  there  is  established  a 
democratic  procedure  for  settling  grievances. 

The  importance  of  settling  grievances  promptly  and  satisfacto- 
rily has  already  been  discussed  at  length.28  The  question  raised 
here  is:  To  what  extent  have  these  councils  proved  a  success  as  a 
means  of  settling  grievances  promptly  and  satisfactorily? 

Paul  W.  Litchfield,  vice-president  of  the  Goodyear  Tire  and 
Rubber  Co.,  writes  that  their  plan  has  proved  to  be  a  great  suc- 
cess in  the  matter  of  settling  grievances;  and  that  it  not  only 
settles  them  more  satisfactorily  than  they  could  have  been  by 
their  former  method,  but  that  it  uncovers  many  difficulties  which 
otherwise  would  not  have  been  known  to  the  management.  He 
adds  that  they  had  a  well-developed  grievance  department  before 
they  adopted  their  present  employees'  representative  plan;  but  it 
was  not  sufficient.  The  men  would  not  come  forward  with  their 
grievances.  They  would  not  try  to  get  justice.  "Nothing  seemed 

"See  Chapter  III. 


130    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [534 

to  overcome  the  men's  feeling  that  the  management  would  refuse 
or  resist  any  request.  The  assembly  did  overcome  it.  Now  there 
are  no  smoldering  grievances."29 

Another  employer  writes  to  the  same  effect.  "Many  workers," 
he  says,  "are  too  timid  to  go  to  the  foreman  or  other  officials. 
They  would  oftentimes  rather  quit.  Now  their  representatives  go 
for  them."  They  will  go  to  their  fellow  workman,  who  in  his 
official  capacity  will  go  to  the  foreman  or  other  officials,  and,  if 
necessary,  on  to  the  council.  Thus  the  "smoldering  grievances" 
are  avoided. 

H.  H.  Weitzel,  manager  of  the  Fuel  Department  of  the  Colo- 
rado Fuel  and  Iron  Co.,  says  that  its  plan  has  resulted  in  a  speedy 
adjustment  of  all  grievances,  in  nearly  all  grievances  being 
adjusted  locally,  and  in  a  steady  decrease  in  the  number  of 
grievances.  All  three  of  these  important  effects,  he  maintains,  are 
directly  due  to  the  fact  that  there  exists  a  regular  procedure  of 
appeal  to  higher  officials  and  to  a  joint  council  where  the  acts  of 
the  foreman  are  reviewed.  The  result  is  that  the  foreman  is  less 
arbitrary  and  more  just.30 

Another  company  writes: 

"Of  greatest  benefit,  we  feel,  is  the  influence  that  the  plan  has 
had  on  employees  in  the  way  of  making  them  more  contented  and 
improving  their  morale.  This  is  brought  about  through  the  em- 
ployees realizing  that  any  grievance  or  problem  which  they 
might  have  will  receive  just  consideration  and  prompt  attention 
when  presented  before  the  council." 

Another  thought  that  is  emphasized  in  a  number  of  replies  to 
the  questionnaire  received  is  that  the  great  need  in  modern 
large-scale  industry  is  to  replace  the  personal  contact  between 
men  and  management,  which  formerly  existed,  but  has  been  lost. 
This,  they  feel,  cannot  be  done  in  the  old  way  when  the  employer 
or  the  manager  knew  all  the  men  personally,  called  them  by  their 
first  names,  and  talked  often  with  them  concerning  the  business 
and  its  problems.  However,  they  do  find  that  the  employer  or 
higher  officials  of  the  management  can  profitably  take  the  time  to 
attend  the  meetings  of  joint  councils.  Such  meetings  thus  afford 
a  substitute  for  the  old-time  personal  relationship.  They  result 

29System,  Vol.  37,  March,  1920,  p.  475. 

"'Iron  Trades  Re-view,  Vol.  64,  May,  1919,  p.  1139. 


535]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  13! 

in  a  direct  personal  acquaintance  and  contact  between  the  leaders 
of  the  men  and  the  officials.  If  the  official  can  gain  the  confidence 
and  good  will  of  these  leaders,  the  confidence  and  good  will  of  the 
rest  of  the  men  can  be  more  easily  attained. 

The  testimony  is  conflicting  in  respect  to  the  effect  of  a  demo- 
cratic method  of  the  handling  of  grievances  upon  the  number  of 
grievances.  Several  firms  report  that  grievances  have  increased, 
but  this  they  do  not  regard  as  an  evil.  One  firm  writes  regarding 
this  point: 

"Grievances  have  increased  considerably.  We  expected  this  and 
welcome  it.  We  believe  that  such  grievances  always  existed,  but 
were  not  discovered  and  settled.  Grievances  nursed  in  secret  un- 
dermine a  plant's  efficiency." 

Another  firm  makes  the  statement  that  grievances  increased  at 
first,  but  later  gradually  diminished  in  number.  The  Colorado 
Fuel  and  Iron  Co.  reports  a  steady  decrease  in  grievances,  due  to 
the  fact  that  the  foremen  are  less  arbitrary  and  unjust. 

9.  The  Ability  of  the  Workers  to  Share  in  the  Control  of  In- 
dustry. One  of  the  questions  frequently  raised  by  employers  when 
considering  the  problem  of  whether  or  not  they  ought  to  adopt  a 
works  council  plan  is:  Are  the  workers  capable  of  sharing  in  the 
control  of  industry,  or  are  they  so  narrow,  biased,  suspicious, 
ignorant,  radical,  and  selfish  that  they  cannot  be  trusted  to  exer- 
cise any  real  authority  over  industry?  This  same  question  is 
sometimes  stated  in  a  broader  way:  Under  the  existing  industrial 
system  with  private  ownership,  competition,  and  the  necessity  of 
paying  good  salaries  and  dividends,  can  the  employer  risk  en- 
trusting a  share  in  the  control  of  his  business  to  the  average 
laborer  ? 

The  evidence  obtained  upon  this  subject  has  been  one  of  the 
most  significant  results  of  this  investigation.  Some  of  the  typical 
statements  of  employers  who  have  tried  some  plan  of  democratic 
industrial  government  may  first  be  given: 

E.  S.  Cowdrick,  assistant  vice-president  of  the  Colorado  Fuel 
and  Iron  Co.,  reports  that  after  a  careful  investigation  of  condi- 
tions throughout  its  plant,  he  finds  that  the  executives  unani- 
mously declare  their  confidence  in  the  sound  sense  and  fair-mind- 
edness of  the  workers,  when  the  latter  are  entrusted  with  the  facts 
upon  which  to  base  their  opinions.  He  adds,  "In  more  than  five 


132    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [536 

years  of  successful  operation  of  the  industrial  representation  plan 
of  the  Colorado  Fuel  and  Iron  Co.,  there  has  been  abundant  proof 
that  the  working  man  is  able  and  willing  to  try  to  do  his  own 
thinking,  and  that,  with  all  the  facts  in  his  possession,  his  judg- 
ment can  be  depended  upon  generally  to  be  sound  and  his 
decisions  fair."31 

Another  executive  writes:  "Men  are  better  prepared  to  carry 
on  industrial  democracy  than  political  democracy.  A  group  of 
men  in  a  shop,  giving  their  lives  to  the  work  done  there,  under- 
stand that  work.  What  they  do  not  know  they  can  learn  quickly. 
Convince  them  that  it  is  to  their  interest,  and  they  will  help  make 
it  a  success.  They  can  see  and  profit  by  mistakes." 

A.  H.  Young  of  the  International  Harvester  Co.  says:  "We 
have  found  that  the  American  workingman  will  play  the  game  on 
the  square  if  his  employer  will  play  it  so  with  him.  He  can  and 
will  make  a  fair  judgment  if  given  the  facts  upon  which  to  base 
his  judgment."32  B.  C.  Forbes,  editor  of  the  Forbes  Magazine, 
after  investigating  several  plans  of  democratic  industrial  manage- 
ment, states:  "Not  in  one  case  has  a  House  of  Representatives 
passed  a  law  which  the  president  has  had  to  veto.  To  me  this  is 
wonderful.  Once  the  men  were  convinced  that  the  boss  was  on 
the  level,  that  they  were  actually  having  some  say  in  wages  and 
hours,  they  were  sobered  by  the  responsibility."33  Mr.  Stafford 
of  Swift  and  Co.  says  that  the  discovery  that  the  workers  prove 
capable,  reasonable,  and  efficient  cooperators  has  been  a  matter 
both  of  surprise  and  education  to  many  officials.  P.  W.  Litchfield, 
vice-president  of  the  Goodyear  Tire  and  Rubber  Co.,  also  testifies 
to  the  fair-mindedness  and  capability  of  the  workers.  He  reports 
that  its  House  of  Representatives,  composed  of  workers  only, 
"keeps  the  confidence  of  both  sides,  because  it  is  fair,  as 
nearly  as  can  be  judged.  It  is  as  ready  to  judge  against  one 
side  as  the  other."34  Eugene  B.  Clark,  president  of  Clark  Equip- 
ment Co.  writes:  "Your  men  will  not  abuse  the  confidence  you 
have  placed  in  them.  The  overwhelming  majority  of  workmen 

^Industrial  Management,  Vol.  62,  July  i,  1921,  p.  32. 
"Some  Experiences  in  Industrial  Cooperation,  pamphlet  published  by  Illinois 
Manufacturers'  Association. 

3SSyste~,n,  Vol.  36,  December,  1919,  p.  1079. 
**lbid.,  Vol.  37,  March,  1920,  p.  475. 


5371  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  133 

are  straight."35  Mr.  Nunn,  president  of  the  Nunn,  Bush,  and 
Weldon  Shoe  Co.,  says:  "We  are  glad  to  get  radicals  on  the  com- 
mittee. It  sobers  and  educates  them.  Never  since  the  adoption  of 
the  plan  has  the  management  found  the  responsibility  unwisely 
placed  on  the  workers,  or  that  a  decision  rendered  by  them  has 
been  unfair  to  the  management."38  The  Bethlehem  Steel  Co.  has 
found  that  its  workers,  in  deciding  questions,  have  shown  "a 
full  understanding  of  the  issue  in  hand,  fair  open-mindedness,  and 
ability  to  consider  both  the  employees'  and  the  employer's  side 
of  the  question."  A  letter  received  from  the  Dutchess  Manu- 
facturing Co.  says,  "We  plan  to  enlarge  the  responsibility  of  the 
committee,  as  it  is  able  to  take  added  responsibility." 

Other  statements,  which  have  been  made  by  executives  of 
plants  having  works  councils,  are  as  follows : 

"In  most  cases  the  men  are  sound,  reasonable  and  open- 
minded."  S.  BOWSER  AND  Co. 

"The  management  could  not  desire  more  in  the  way  of  co- 
operation than  has  been  given  it  by  the  employee  representa- 
tives. As  a  rule,  the  representatives  are  of  a  considerably  higher 
intelligence  than  the  average  of  the  employees  they  represent." 

WALWORTH  MANUFACTURING  Co. 

"Our  workers  have  thus  far  elected  very  able  men  to  represent 
them,  and  they  have  shown  a  keen  desire  to  cooperate." 

WESTINGHOUSE  ELECTRIC  AND  MFG.  Co. 

"We  are  very  much  impressed  by  the  type  of  men  who  are  se- 
lected to  represent  the  men  in  the  committee  meetings,  and  in 
most  cases  find  them  reasonable,  trustful,  and  of  real  value  to 
management  and  men. 

"While  at  times  the  progress  would  be  quite  stormy,  there  never 
has  been  an  occasion  where  our  men  did  not  show  good  judgment 
and  exceeding  fairness  with  the  company  in  their  final  con- 
clusions." HYDRAULIC  STEEL  Co. 

These  are  but  a  very  few  examples  of  the  testimony  which  has 
been  found  upon  this  point.  The  evidence  at  hand  at  this  writing 
stands : 

"Iron  Age,  Vol.  104,  July  24,  1919,  p.  239. 
36Factory,  Vol.  25,  July,  1920,  p.  41. 


134    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [538 

Companies  testifying  that  the  men  have  been,  on  the  whole, 
capable,  fair-minded  and  helpful,  107. 

Companies  testifying  that  the  men  have  not  proved  satisfactory 
in  their  committees,  3. 

The  fairly  enthusiastic  way  in  which  so  many  employers  are 
praising  the  work  of  their  men  under  a  plan  which  extends  to 
them  a  measure  of  self-management  may  be  furthering  the  cause 
of  democratic  industrial  management  more  than  such  employers 
realize. 

10.  Education.  From  time  to  time  in  connection  with  different 
subjects,  mention  has  been  made  of  the  theory  that  democratic 
industrial  management  is  a  valuable  means  to  the  end  of  educat- 
ing the  men  to  the  facts  and  needs  of  business  and  the  prob- 
lems of  management  so  that  they  will  have  a  more  enlightened 
concept  of  industrial  justice,  will  gain  a  new  interest  in  the  busi- 
ness, and  will  more  willingly  cooperate  to  make  it  a  success. 

However,  there  is  a  second  phase  to  this  problem  of  education. 
Education  for  the  worker  is  greatly  needed;  but  there  is  reason 
to  believe  that  the  need  for  education  of  the  employers  is  even 
greater.  Great  inefficiency  in  the  utilization  of  the  human  factor 
in  American  industries  is  admitted.  If  the  arguments  for  more 
democratic  industrial  management  as  a  means  to  efficiency  are 
valid,  then  there  is  great  need  of  educating  employers  to  a  realiza- 
tion of  such  truths.  Moreover,  there  is  no  more  reason  to  believe 
that  the  employees  need  education  in  the  problems  of  manage- 
ment in  order  to  have  a  more  intelligent  concept  of  justice,  than 
there  is  to  believe  that  the  employers  need  education  in  the 
problems  of  the  workers  in  order  that  their  concept  of  justice  may 
be  broadened. 

The  value  of  more  democratic  industrial  management  through 
works  councils  and  joint  works  councils,  as  a  means  to  give 
needed  education  to  both  employers  and  men,  is  one  of  the  points 
most  frequently  emphasized  by  employers.  Speaking  of  its  plan 
of  joint  control,  the  General  Electric  Co.  makes  this  statement: 

"By  dealing  in  this  way  a  continuous  education  of  employees 
and  foremen  as  to  the  needs  and  requirements  of  a  complicated 
business  has  been  affected.  The  need  of  such  paeans  has  been  felt 
in  this  works  for  many  years.  In  view  of  the  limited  information 
possessed  by  our  employees,  many  misunderstandings  and  narrow 
views  had  been  entertained,  which,  under  present  circumstances, 


5391  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  135 

with  a  broader  viewpoint,  have  disappeared,  and  an  increased 
sympathy  with  the  aims  and  purposes  of  the  management  has 
been  arrived  at.  Many  instances  could  be  cited  as  showing  the 
change  of  attitude  which  has  resulted  from  conferences  between 
employees  and  management  in  these  committees." 

An  executive  of  a  large  eastern  factory  writes: 

"There  is,  of  course,  in  many  corporations  a  belief,  amounting 
often  to  a  prejudice,  that  the  employee  representation  plan  will 
develop  in  the  direction  of  Sovietism.  We  do  not  doubt  that 
where  the  plan  is  unwisely  operated  such  a  tendency  will  develop, 
particularly  in  periods  of  extreme  prosperity.  On  the  other  hand, 
we  believe  we  see  strong  evidence  of  a  reaction  from  an  extreme 
emphasis  upon  distribution  which  has  characterized  economic 
thought  for  the  last  couple  of  centuries  to  a  realization  that  a 
greater  part  of  the  problem  lies  in  the  field  of  production.  This 
is  somewhat  parallel  to  the  point  we  have  discussed  above.  From 
practical  experience  in  the  operation  of  our  own  plan,  particularly 
during  the  last  year  or  two,  we  have  noted  a  growing  conviction 
in  the  minds  of  our  employees  that  their  hope  for  a  better  stand- 
ard of  living  rests  not  upon  a  greater  share  in  the  distribution  of 
the  net  production  of  the  enterprise,  but  rather  upon  the  develop- 
ment of  a  greater  production  from  which  to  obtain  their  share. 

"In  the  first  place,  they  find  that  if  they  received  the  entire 
distribution  available  for  consumption,  their  condition  would  not 
be  materially  improved;  and  in  the  second  place,  they  find  in  the 
discussion  that  arises  that  the  share  they  are  receiving  is  much 
greater  than  they  had  ever  dreamed.  In  the  third  place,  if  the 
management  is  fair,  the  employees  have  an  opportunity  of  con- 
vincing themselves  of  the  fact,  that  in  the  end  this  brings  them 
to  what  we  have  indicated  above,  namely  a  conviction  that  the 
only  possible  source  of  any  material  improvement  in  their  stand- 
ard of  living  lies  in  the  direction  of  an  increased  production.  One 
of  the  common  deterrents  to  efficiency  is  the  belief  that  the  in- 
creased production  will  go  to  the  employer,  not  to  the  employee 
who  is  its  cause." 

Mr.  George  S.  Hawley,  manager  and  counsel  of  the  Manu- 
facturers' Association,  Bridgeport,  Conn.,  says  of  the  work  of  the 
committees  in  that  city: 

"In  several  of  the  largest  and  in  some  of  the  smaller  plants  the 
committees  are  now  working  most  enthusiastically  and  effectively. 


136    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [540 

Not  only  do  they  meet  with  the  management  when  they  have 
matters  to  present,  but  they  meet  regularly  and  take  up  questions 
of  shop  conditions  and  their  betterment,  wages,  cost  of  living,  and 
other  matters  in  which  they  have  a  deep  interest.  They  have  also 
learned  something  about  industrial  problems  from  the  standpoint 
of  the  management.  They  have  come  to  realize  that  their  employ- 
ers are  fair-minded,  willing  to  inform,  and  anxious  to  do  the  right 
thing.  As  a  result,  a  fine  spirit  has  been  developed  among  the 
workers  in  these  plants."37 

Mr.  A.  H.  Young  of  the  International  Harvester  Co.  gives  the 
following  interesting  comment  upon  the  possibilities  of  educating 
the  worker  to  an  understanding  of  financial  problems: 

"One  big  thing  we  have  done  is  this.  I  wonder  if  you  realize 
just  how  promiscuous  is  the  propaganda  put  out  by  organized 
labor  and  labor  agents;  how  they  talk  of  your  surplus,  your  re- 
serves; and  give  the  impression  to  the  workmen  that  they  are 
simply  gold  dollars  locked  in  a  vault.  We  have  had  an  opportun- 
ity to  talk  that  thing  over  and  show  them  that  while  the  Harvester 
Co.  has  a  surplus  of  $70,000,000  that  was  built  up  by  nineteen 
years  of  careful  financing,  that  it  is  not  gold  dollars;  it  is  brick 
and  mortar,  new  plants,  and  new  machines  ....  and  it  is  com- 
pared with  the  pay-roll  of  nearly  $90,000,000  the  year  before;  that 
this  surplus  built  up  in  nineteen  years  is  a  guarantee  to  them  of 
the  stable  financial  integrity  of  the  company  and  that  in  those 
nineteen  years  we  have  built  up  less  than  we  spend  in  one  year 
in  wages."38 

R.  G.  A.  Phillips,  vice-president  of  the  American  Multigraph 
Co.,  regards  the  education  work  accomplished  by  their  works 
council  plan  as  "indispensable."39 

Another  employer  says:  "Hitherto,  the  labor  leader  has  been 
the  only  teacher  of  the  workingman,  and  we  have  found  that  it 
pays  us  to  endeavor  to  educate  the  worker  in  a  way  that  teaches 
him  the  value  of  cooperation.  We  find  our  joint  plan  a  big  help  in 
this  direction." 

37Hawley,  George  S.,  Bridgeport  Employees  Committees,  published  by  the 
Manufacturers'  Association,  Bridgeport,  Conn. 

**Some  Experiences  in  Industrial  Cooperation,  pamphlet  published  by  the 
Illinois  Manufacturers'  Association,  Chicago. 

"Iron  Trades  Review,  Vol.  65,  July,  1919,  p.  221. 


541  ]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  IJ7 

In  answering  the  questionnaire  sent  to  it,  the  Walworth  Mfg. 
Co.  makes  this  statement: 

"A  part  in  discussing  shop  matters  at  the  factory  council  meet- 
ings naturally  puts  the  employee  representatives  in  touch  with 
many  angles  of  the  business  which  they  perhaps  little  dreamed  of 
before.  In  order  that  the  employee  representatives  may  appre- 
ciate the  management's  side  of  a  question,  the  management  must 
give  them  an  insight  into  many  confidential  matters  relative  to  the 
business.  Their  viewpoint  is  thus  greatly  broadened,  and  we  have 
found  that  as  a  result,  these  employee  representatives  are  a 
steadying  influence  among  the  employees  whom  they  represent. 
We  have  also  found  that  they  take  a  deep  interest  in  shop  matters, 
as  evidenced  by  the  number  of  suggestions  which  they  make  at 
council  meetings  pertaining  to  shop  efficiency,  increased  produc- 
tion, lowering  of  costs,  and  the  prevention  of  accidents." 

Another  firm  writes:  "Looking  at  the  plan  from  a  different 
point  of  view,  however,  we  might  say  that  practical  experience  in- 
dicates that  much  is  accomplished  under  the  employee  representa- 
tion plan  in  educating  the  employees  to  an  understanding  of 
profit.  This  has  been  particularly  true  during  the  last  four  or 
five  years,  when  the  employee  has  seen  so  clearly  that  while 
efficiency  may  be  at  its  lowest,  business  profits  are  at  their  high- 
est; and  now  while  productive  efficiency  of  the  employee  is  at  its 
highest,  profits  are  at  their  lowest.  During  the  former  part  of  the 
period  employees  displayed  a  strong  tendency  to  believe  that  their 
wages  or  a  considerable  share  of  their  wages  should  come  out  of 
the  profits  of  industry.  Now,  on  the  contrary,  they  find  them- 
selves compelled  to  defend  an  adequate  wage  rate  even  against 
a  severe  loss  in  the  enterprise.  In  short,  they  are  having  a  prac- 
tical illustration  of  the  difference  between  wages,  interest,  and 
profit,  using  the  terms  in  an  economic  sense.  Unquestionably 
industrial  democracy  is  a  strong  educational  factor  in  problems 
of  this  kind.  Obviously,  at  the  same  time,  the  employee  begins 
to  obtain  a  comprehension  of  the  problems  which  strictly  relate 
to  management.  He  has  more  sympathy  with  the  management 
and  realizes  how  futile  would  be  his  attempt  to  enter  that  field 
under  existing  industrial  and  social  conditions." 

Also,  democratic  industrial  management  proves  to  have  an 
educational  value  for  the  workers,  due  to  the  fact  that  it  trains 
them  for  more  responsible  positions.  This  comes  about  chiefly,  of 


138    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [542 

course,  through  their  service  as  representatives  on  the  works 
councils.  With  this  is  the  benefit  to  the  management  of  finding 
those  who  have  executive  ability. 

In  the  questionnaire  mentioned  above  the  question  was  asked, 
"Have  you  found  reason  to  believe  that,  as  a  result  of  the  exper- 
ience and  education  gained  by  the  workers  through  your  plan, 
they  will  become  fitted  for  positions  of  higher  responsibility?"  The 
majority  of  the  answers  received  were  to  the  effect  that  it  is  too 
early  in  the  experience  of  these  plans  to  judge;  but  twelve  firms 
replied  in  the  affirmative,  and  three  in  the  negative.  This  large 
proportion  of  affirmative  answers  seems  to  indicate  that  results, 
beneficial  to  the  employees,  are  already  beginning  to  show  in 
many  places. 

Without  taking  space  for  further  quotations,  the  following  sum- 
mary may  be  made  of  the  ways  in  which  more  democratic  in- 
dustrial management,  in  the  form  of  works  councils  or  joint  works 
councils  and  similar  bodies,  has  been  found  in  actual  practice  to 
be  a  source  of  valuable  education  for  both  workers  and  employers. 

For  the  workers,  it  has  broadened  their  knowledge  of  the  prob- 
lems of  management;  has  brought  them  to  see  the  importance 
of  the  problem  of  production;  has  helped  to  train  men  to  take 
more  responsible  positions;  has  shown  them,  in  many  cases,  that 
their  employers,  according  to  their  concept  of  justice  and  a  square 
deal,  are  sincerely  trying  to  treat  labor  fairly;  and  has  taught 
them  the  advantages  which  can  result  from  constructive  coopera- 
tion. 

For  the  employers,  it  has  greatly  increased  their  ability  to 
handle  men  successfully,  by  showing  them  the  viewpoint,  prob- 
lems, and  worries  of  the  worker,  as  set  forth  in  the  joint  council. 
In  other  words,  it  has  been  an  education  in  industrial  psychology, 
which  many  employers  need.  It  has  taught  them  the  important 
fact  that  most  of  the  trouble  between  labor  and  management  is 
due  to  ignorance  and  misunderstanding,  and  is,  therefore,  easily 
remedied  in  joint  bodies  where  each  presents  its  view  and  the  facts 
are  jointly  determined.  It  has  taught  them  that  the  workers  are 
fair-minded  and  capable  of  helping  in  management,  instead  of 
being  radical,  selfish,  ignorant,  and  incapable  of  sharing  in  in- 
dustrial control.  It  has  shown  them,  through  results  gained,  that 
there  are  great  possibilities  of  increased  efficiency  if  the  human 


543]  RESULTS  ACCOMPLISHED  BY  NON-UNION  COUNCILS  139 

factor  is  properly  managed  so  that  its  spontaneous  constructive 
cooperation  will  be  gained.  And  it  has  taught  them  that  more 
democratic  and  less  autocratic  industrial  management  is  one  path- 
way which  leads  to  that  spontaneous  and  constructive  coopera- 
tion. 

It  is  refreshing  to  note  in  the  letters  received  from  executives 
of  various  companies  occasional  reference  to  a  broader  purpose 
than  that  of  efficiency  and  profits.  The  hope  is  expressed  that  the 
training  received  by  the  million  and  a  half  or  more  of  workers 
now  participating  in  employee  representation  plans,  will  not  fail  to 
make  of  them  more  intelligent  and  efficient  participants  in  demo- 
cratic political  government.  Familiarity  with  their  duties,  priv- 
ileges, and  responsibilities  under  representative  government,  and 
the  methods  by  which  they  can  make  such  a  gcvernment  function 
in  the  interests  of  the  constituency,  would  appear  to  be  the  inevit- 
able and  socially  beneficial  results  of  democratic  industrial  man- 
agement. 


CHAPTER  V 
UNION  JOINT  COUNCILS  IN  THE  UNITED  STATES 

A  tendency  has  prevailed  among  those  fostering  the  non-union 
council  movement  in  the  United  States  to  enlarge  upon  the 
virtues  of  this  new  form  of  "industrial  democracy,"  and  apparent- 
ly to  imply  that  industrial  democracy  had  not  been  previously 
developing  in  American  industrial  life.  In  any  event,  there  is  a 
noticeable  tendency  in  this  connection  to  ignore  the  work  of  the 
trade  union  and  the  industrial  union.  By  many  writers  the  new 
non-union  councils  are  designated  as  examples  of  "industrial 
democracy,"  in  contrast  to  collective  bargaining  through  trade 
and  industrial  unions. 

On  the  other  hand,  the  representatives  of  organized  labor  main- 
tain that  these  so-called  "industrial  democracy"  plans  are  nothing 
more  nor  less  than  emasculated  unions,  following  essentially  the 
same  general  line  of  procedure  that  is  followed  in  collective 
bargaining  through  the  orthodox  trade  unions. 

To  compare  adequately  these  non-union  councils  and  the  trade 
unions,  it  is  necessary  first  to  describe  briefly  the  nature  of  the 
procedure  followed  in  collective  bargaining  by  unions  and  em- 
ployers, and  to  reveal  to  what  extent  the  unions,  through  shop 
committees,  shop  stewards,  joint  committees,  joint  councils,  and 
trade  agreements,  have  obtained  for  the  workers  a  share  in  in- 
dustrial management  similar  to  that  which  the  non-union  council 
plans  have  attained.  This  can  be  accomplished  best  by  describing 
the  union  procedure  in  its  entirety,  and  then  comparing  it  with  the 
procedure  of  non-union  council  plans. 

A.  THE  THREE  TYPES  OF  UNION  JOINT  COUNCILS 

There  are  three  principal  phases  of  joint  industrial  management 
by  unions  and  employers  as  it  exists  in  the  United  States  today: 

1.  The  formation  of  trade  agreements. 

2.  The  local  application  of  such  agreements,  which  includes  the 
settling  of  all  disputes  arising  between  the  parties  involved. 

3.  The  constructive  work  carried  on  by  national  or  international 
joint  councils  which  have  been  formed  recently  in  certain  indus- 
tries. 

These  three  phases  may  be  described  briefly  in  the  order 
named. 

140 


545 1  UNION  JOINT  COUNCILS  IN  THE  UNITED  STATES  14! 

I.  Joint  Councils  to  Form  Trade  Agreements.  It  is  the  aim  of 
every  union  to  obtain  a  trade  agreement  which  will  regulate  all 
matters  in  which  the  workers  are  most  directly  concerned.  The 
body  which  makes  these  agreements  is  essentially  a  legislative 
body  determining  general  rules  and  regulations  which  will  govern 
all  phases  of  industrial  relations  dealt  with  by  the  agreement.  It 
is  important  to  note  the  character  of  such  legislative  bodies. 

The  joint  conference  plan  for  drawing  up  trade  agreements  has 
been  followed  in  the  coal  industry  with  more  or  less  regularity 
since  1898.  An  interstate  joint  conference  has  been  held  annually 
in  the  central  competitive  field.  This  joint  conference  is  composed 
of  eight  miners  and  eight  operators  from  each  state  (Illinois, 
Indiana,  Ohio,  and  Pennsylvania).  A  unanimous  vote  is  always 
necessary  to  reach  a  decision.  The  state  joint  conference  follows 
the  interstate  joint  conference.  It  deals  with  local  matters  and  is 
very  much  the  same  in  organization  and  methods  as  the  interstate 
conference.  Most  of  the  work  of  the  state  joint  conference  is 
carried  on  by  a  scale  committee,  which  is  composed  of  two  oper- 
ators and  two  miners  from  each  of  the  nine  districts.  It  may 
appoint  special  committees  for  drawing  up  agreements.  The 
agreements  drawn  up  by  these  state  and  interstate  joint  confer- 
ences have  contained  very  extensive  rules  and  regulations.  Such 
conferences  are,  therefore,  properly  regarded  as  representative 
legislative  bodies  which  have  exercised  a  considerable  degree  of 
control  in  the  management  of  the  mining  industry. 

Representatives  of  the  International  Molders'  Union  of  North 
America  have  met  in  an  "annual  joint  conference"  with  represent- 
atives of  the  Stove  Founders'  National  Defense  Association  for 
the  last  twenty-two  years.  An  elaborate  trade  agreement  has 
been  worked  out  and  agreed  upon  each  year.  There  are  six  rep- 
resentatives of  each  side  in  this  joint  conference. 

The  National  Window  Glass  Workers'  Union  elects  by  refer- 
endum vote  a  committee  of  three,  called  a  "Wage  Committee." 
The  manufacturers  choose  a  similar  committee  and  these  two 
form  a  joint  committee,  which  has  met  annually  for  the  past  thir- 
teen years.  Each  year  it  has  adopted  an  elaborate  trade  agree- 
ment. 

The  National  Brotherhood  of  Operative  Potters  has  a  "Con- 
ference Committee."  This  committee  meets  with  the  Labor  Com- 


142     WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [546 

mittee  of  the  United  States  Potters'  Association  to  form  a  joint 
council.  This  joint  council  meets  every  two  years,  or  oftener, 
and  draws  up  elaborate  trade  agreements. 

The  International  Union  of  United  Brewery,  Flour,  Cereal,  and 
Soft  Drink  Workers  of  America  enters  into  local  agreements 
made  by  a  joint  council  of  employers  and  representatives  of  the 
local  union.  These  are  made  for  a  period  of  one  year,  arrange- 
ments being  made  to  reopen  negotiations  before  their  expiration. 

The  United  Garment  Workers  of  America  enter  into  a  national 
agreement  with  the  Union  Made  Manufacturers'  Association. 
Their  agreement  is  made  by  a  joint  council  of  union  and  employer 
representatives,  which  meets  once  every  year,  or  more  often  if 
necessary. 

The  International  Typographical  Union  has  over  800  locals 
which  enter  into  agreements  with  the  local  employers.  These 
agreements  are  made  by  a  joint  council  of  the  employers  and  em- 
ployees, and  always  provide  for  a  renewal  of  negotiations  before 
they  expire. 

The  Glass  Bottle  Blowers'  Association  of  the  United  States  and 
Canada  has  entered  into  national  agreements  with  the  employers 
for  twenty  years.  A  joint  council  of  representatives  of  the  unions 
and  of  the  employers  holds  an  annual  preliminary  conference  in 
May  and  an  annual  final  conference  in  July.  This  provides  for 
regular  legislative  sessions. 

These  few  examples  show  the  typical  method  of  procedure  in 
the  formulation  of  trade  agreements  in  the  United  States.  These 
joint  councils,  as  they  may  properly  be  called,  in  which  trade 
agreements  are  formed,  are  legislative  bodies.  The  process  of 
bargaining  which  takes  place  in  such  bodies  is  very  similar  to  the 
procedure  in  the  legislative  assemblies  of  democratic  states  or 
nations,  where  representatives  of  various  groups  and  interests 
strive  to  look  after  the  interests  of  their  constituencies. 

In  all  cases,  these  industrial  legislative  groups  are  composed  of 
representatives  of  the  employers  and  of  the  workers  involved. 
The  workers'  representatives  are  usually  their  elected  officials  or 
especially  elected  committees.  The  employers  either  attend  in 
person,  or  appoint  or  elect  representatives.  This  description  ap- 
plies whether  the  agreement  is  local,  district,  or  national  in  scope. 
The  large  majority  of  trade  agreements  in  the  United  States  are 


547]  UNION  JOINT  COUNCILS  IN  THE  UNITED  STATES  143 

local  in  character  and  are  made  by  local  union  representatives  and 
employers. 

The  majority  of  trade  agreements  made  by  these  joint  councils 
are  entered  into  for  a  period  of  one  or  two  years,  with  provision 
for  another  conference  before  the  date  of  their  expiration,  or  for 
an  indefinite  period  with  a  provision  that  either  party  desiring  to 
terminate  the  agreement  must  give  notice  of  his  desire  well  in 
advance  of  the  date  on  which  he  wishes  said  agreement  to  termi- 
nate. This  makes  possible  renewed  negotiations  by  a  joint  council, 
and  also  gives  a  degree  of  permanency. 

The  question  next  arises  as  to  what  matters  are  handled  by 
these  representative  legislative  councils.  Are  they  merely  a  bar- 
gaining group,  fighting  over  a  wage  scale  (which,  however,  is  the 
most  vital  phase  of  industrial  relations),  or  do  they  legislate  on 
other  important  matters? 

In  the  first  place,  it  should  be  noted  that  they  are  not  primarily 
bodies  for  the  settling  of  disputes.  They  are  legislative  bodies 
which  draw  up  trade  agreements  in  which  there  is  always  provi- 
sion for  some  method  of  handling  disputes  that  may  arise  between 
the  parties  represented. 

The  scope  of  trade  agreements  can  be  indicated  best  by  an 
analysis  of  the  subjects  dealt  with  in  a  number  of  sample  agree- 
ments forwarded  to  the  writer  by  union  officials.  In  the  sample 
agreement  sent  by  the  International  Hod-Carriers',  Building  and 
Common  Laborers'  Union  of  America,  the  following  topics  are 
dealt  with:  recognition  of  the  union;  hours;  wages;  overtime; 
working  conditions;  holidays;  transportation  to  work;  arbitra- 
tion for  disagreements  or  disputes  arising;  time  of  payment; 
medium  of  payment;  provision  for  union  labor;  provision  for 
stewards. 

This  summary  has  been  made  from  an  agreement  sent  by  the 
International  Stereotypers'  and  Electrotypers'  Union:  provision 
for  local  and  international  arbitration  boards;  provision  for  con- 
ciliation; wages;  hours;  rules  for  apprentices;  work  to  be  per- 
formed by  journeymen  and  apprentices;  provision  of  a  substitute 
when  a  regular  lays  off;  overtime;  holidays;  time  of  starting  and 
quitting;  one  day's  notice  before  discharge;  provision  for  men 
employed  on  particular  machine;  provision  that  foremen  be  mem- 
bers of  union;  discharge  controlled  by  joint  committee. 


A  typical  agreement  of  the  International  Ladies  Garment 
Workers'  Union  contains  regulations  on  these  subjects:  closed 
shop;  provision  for  shop  chairman  to  adjust  disputes;  right  of 
union  officials  to  investigate  shops;  minimum  weekly  wages  and 
minimum  hourly  wages;  shop  committee  from  employees  to  set- 
tle piece-rates;  hours;  overtime;  holiday  pay;  distribution  of 
work;  limited  discharge;  arbitration;  working  conditions;  piece- 
rates. 

A  study  of  typical  agreements  of  twenty  unions  has  given  the 
following  results:  Ay*****, 

Subjects  Dealt  Dealing  With 

With  Each  Subject 

Wages 20 

Hours 18 

Conditions  of  work 14 

Discharge 12 

Union  recognition 8 

Closed  shop 5 

Union  preference 6 

Foreman  or  forelady  to  be  union  member 4 

Method  of  settling  disputes 18 

Overtime 16 

Distribution  of  work 9 

Introduction  of  new  machinery 6 

Introduction  of  new  processes 6 

Apprenticeship 14 

Holidays 17 

Lost  time 4 

Defective  work 3 

Time  and  medium  of  payment 8 

Promotion 6 

Enforcement  of  state  labor  laws 5 

These  facts  serve  to  indicate,  in  a  rather  partial  way,  to  what 
extent  the  trade  unions  have  already  obtained  joint  democratic 
control  of  industry  through  joint  representative  legislative  councils 
which  formulate  the  rules  and  regulations  covering  many  of  the 
important  problems  of  industrial  relations. 

2.  Local  Union  Joint  Councils.  The  second  phase  of  joint  in- 
dustrial management,  as  carried  on  by  unions  and  employers,  is 


549]  UNION  JOINT  COUNCILS  IN  THE  UNITED  STATES  145 

the  local  application  of  trade  agreements.  This  is  largely  a  matter 
of  settling  all  disputes  which  arise  between  the  local  parties  to  the 
agreement. 

The  legislative  bodies  described  above  are  seldom,  if  ever,  local 
bodies,  in  the  sense  of  confinement  to  representatives  of  em- 
ployees and  management  from  a  single  company  or  plant.  The 
workers'  representatives  on  such  bodies  are  invariably  selected 
or  appointed  from  the  local,  district,  or  national  union. 

The  question  raised  at  this  point  is  whether  or  not  orthodox 
unionism  has  provided  any  local  representative  bodies  which  exer- 
cise a  share  in  industrial  management  similar  to  that  exercised  by 
non-union  council  plans. 

In  most  trade  agreements,  provision  is  made  for  local  joint 
bodies  to  settle  disputes.  Such  bodies  are  expected  to  make  all 
adjustments  that  may  be  necessary  to  insure  a  fair  and  just  inter- 
pretation of  the  spirit  and  letter  of  the  trade  agreements  in  apply- 
ing them  to  the  local  or  individual  situation.  The  following  digest 
of  the  provisions  in  a  number  of  trade  agreements  for  the  han- 
dling of  disputes  throws  much  light  upon  this  phase  of  union 
procedure : 

Amalgamated  Sheet  Metal  Workers'  Union.  A  shop  steward 
and  a  representative  of  the  management  adjust  disputes.  Appeal 
to  a  joint  arbitration  board  of  six  representatives  of  the  union,  and 
six  from  the  management,  is  permitted. 

International  Stereotypers'  and  Electrotypers'  Union  of  North 
America.  Shops  are  organized  into  "chapels."  These  chapels  elect 
a  chairman.  This  chairman  and  a  representative  of  the  manage- 
ment form  a  joint  committee  to  settle  disputes  that  arise;  appeal 
may  be  made  to  a  joint  committee  of  representatives  of  the  union 
and  the  management;  arbitration  by  an  impartial  umpire  is  the 
last  resort. 

Brotherhood  of  Painters,  Decorators,  and  Paper  Hangers. 
Union  shop  stewards  and  representatives  of  the  management  form 
a  joint  committee  to  adjust  disputes;  arbitration  is  resorted  to  if 
this  joint  committee  fails  to  agree. 

International  Slate,  Tile,  and  Asbestos  Roofers'  Union  of  Amer- 
ica. Shop  stewards  and  representatives  of  the  management  form 
a  committee  to  adjust  disputes,  if  possible;  appeal  may  be  made 


to  a  joint  committee  of  three  representatives  from  the  union  and 
three  from  the  management;  final  appeal  is  to  an  impartial  um- 
pire, chosen  by  the  joint  committee. 

National  Brotherhood  of  Operative  Potters.  All  disputes  are 
handled  by  a  joint  council  composed  of  a  representative  of  the 
management  and  the  union  shop  committee;  appeal  is  granted  to 
a  joint  standing  committee  of  three  representatives  from  the 
union,  three  from  the  management,  and  a  seventh  member  chosen 
by  these  six. 

International  Association  of  Machinists.  A  union  shop  com- 
mittee and  the  foreman  form  a  joint  committee  to  adjust  disputes; 
appeal  may  be  made  to  a  joint  committee  composed  of  union  men 
and  the  employer,  or  his  representatives;  final  settlement  is  by 
arbitration. 

International  Union  of  United  Brewery,  Flour,  Cereal,  and  Soft 
Drink  Workers  of  America.  Shop  stewards  are  elected  in  each 
shop.  These  stewards  and  a  representative  of  the  management 
form  a  joint  committee  to  settle  disputes;  appeal  may  be  made  to 
a  joint  committee  of  two  representatives  from  the  union  and  two 
from  the  management;  final  appeal  to  an  impartial  arbitrator  is 
granted. 

International  Hod  Carriers',  Building  and  Common  Laborers' 
Union  of  America.  The  shop  steward  and  a  management  repre- 
sentative adjust  disputes. 

International  Association  of  Heat  and  Frost  Insulators  and 
Asbestos  Workers.  A  joint  committee,  called  a  "Trade  Board," 
composed  of  an  equal  number  of  representatives  from  each  side, 
adjusts  disputes;  this  Board  holds  regular  meetings. 

Slate,  Tile,  and  Composition  Roofers',  Damp  and  Waterproof 
Workers'  Association.  A  joint  shop  committee  of  three  represent- 
atives from  the  union  and  three  from  the  management  adjust  all 
disputes.  Appeal  to  arbitration  is  granted. 

International  Printing  Pressmen's  and  Assistants'  Union  of 
North  America.  A  joint  shop  committee  of  two  representatives 
from  the  union  and  two  from  the  management  adjust  disputes. 
Arbitration  is  permitted  as  a  last  resort. 

International  Ladies  Garment  Workers'  Union.  Union  workers 
in  each  shop  elect  a  chairman,  who  reports  complaints  to  the 
union  business  agent.  The  latter  meets  with  the  representative 


55 1  ]  UNION   JOINT  COUNCILS   IN  THE   UNITED  STATES  147 

of  the  employer  to  make  adjustments;  appeal  may  be  made  to  a 
joint  committee  composed  of  a  representative  of  the  union  and  a 
representative  of  the  employer's  association  to  which  the  employer 
belongs.  Arbitration  is  the  final  step. 

International  Brotherhood  of  Pulp,  Sulphite,  and  Paper  Mill 
Workers.  Each  local  union  elects  a  grievance  committee,  which 
meets  with  representatives  of  the  management.  This  joint  com- 
mittee considers  all  disputes  that  arise;  appeal  is  granted  to  the 
higher  union  and  company  officials. 

United  Brick  and  Clay  Workers.  Shop  stewards  or  yard  stew- 
ards, elected  by  the  union  workers  in  the  shop  or  yard,  or  ap- 
pointed by  the  union,  meet  with  the  management  to  adjust  griev- 
ances; appeal  is  made  to  a  joint  grievance  committee  in  some 
cases,  and  in  other  cases,  to  the  business  agent  of  the  union  and  a 
representative  of  the  management. 

Glass  Bottle  Blowers'  Association.  A  factory  committee,  elected 
by  the  union  workers  in  a  factory,  takes  up  with  the  management 
matters  needing  adjustment. 

International  Typographical  Union.  Each  composing  room  is 
organized  into  a  "chapel."  Each  chapel  elects  a  chairman  who 
takes  up  with  the  management  all  matters  needing  adjustment. 

Pattern  Makers'  League  of  North  America.  The  men  in  each 
shop  elect  a  shop  committee,  which  takes  up  with  the  management 
all  matters  needing  adjustment. 

International  Brotherhood  of  Electrical  Workers.  In  some 
cases,  shop  stewards,  and  in  some  cases,  shop  committees  take  up 
grievances  with  the  management;  appeal  to  a  joint  committee  of 
union  and  management  representatives  is  granted. 

United  Garment  Workers  of  America.  Union  members  in  each 
shop  elect  a  shop  committee,  which  takes  up  with  the  management 
all  matters  needing  adjustment. 

The  Laundry  Workers'  International  Union.  A  joint  committee 
of  two  representatives  from  the  union  and  two  from  the  manage- 
ment adjust  disputes.  These  choose  an  impartial  arbitrator,  if 
necessary. 

Cigar  Makers'  International  Union  of  America.  Every  organized 
shop  in  this  union  has  a  shop  steward,  elected  by  the  workers  in 
the  shop.  He  takes  up  with  the  management  all  matters  needing 
adjustment.  Appeal  to  a  union  committee,  which  meets  with  rep- 
resentatives of  the  management,  is  granted. 


148    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [552 

The  Amalgamated  Clothing  Workers  of  America.  In  connection 
with  this  union,  a  word  may  be  said  respecting  the  Hart,  Schaffner 
and  Marx  plan  of  settling  disputes. 

This  plan,  developed  by  Hart,  Schaffner  and  Marx  of  Chicago, 
has  been  adopted  in  many  clothing  concerns  in  the  United  States, 
especially  in  Chicago,  New  York,  Rochester,  and  Baltimore.  This 
plan  provides  for  the  election  of  one  shop  representative  from 
each  shop.  These  representatives  have  charge  of  adjusting  com- 
plaints within  the  shop.  There  are  also  deputies,  appointed  by 
the  union,  that  have  power  to  investigate  and  adjust  grievances 
or  disputes.  In  case  that  either  or  both  of  these  parties  have  failed 
to  adjust  a  matter  with  the  management,  it  may  be  appealed  to  a 
trade  board  having  five  representatives  of  the  union,  five  from 
the  company,  and  an  impartial  chairman. 

In  addition  to  these  methods  of  procedure  must  be  mentioned 
the  method  of  having  the  business  agent  of  the  local  union  adjust 
disputes  with  the  management.  In  making  this  digest,  there  were 
examined  thirty-five  trade  agreements  made  by  as  many  different 
unions.  The  procedure  followed  by  twenty-two  of  these  has  been 
indicated.  The  remaining  thirteen  provide  that  the  business  agent 
of  the  local  union  serve  as  the  workers'  representative  to  adjust 
disputes.  This  usually  results  in  creating  a  joint  council  of  one 
representative  of  the  workers,  and  one  or  more  from  the  manage- 
ment. If  this  group  fails  to  make  adjustments,  appeal  to  higher 
officers  of  the  union  and  the  company  is  permitted.  If  this  higher 
representative  group  fails,  arbitration  is  usually  provided. 

This  inquiry  has  shown  that  a  very  large  number  of  unions  in 
the  United  States  have  succeeded  in  obtaining  provisions  in  their 
trade  agreements  for  the  settlement  of  disputes  by  a  joint  com- 
mittee, composed  of  a  representative  or  representatives  of  both 
the  workers  and  the  management  in  the  local  shop  or  plant. 
Many  of  the  shop  stewards,  shop  committees,  shop  delegates,  shop 
chairmen,  or  adjustment  committees,  as  the  various  agreements 
call  them,  are  elected  by  the  union  workers  in  the  shop  to  meet 
with  representatives  of  the  management  to  adjust  disputes.  In 
some  cases,  these  shop  representatives  are  appointed  by  the  union 
from  among  the  union  members  in  the  shop.  In  nearly  all  cases, 
appeal  is  granted  from  the  first  tribunal  to  higher  union  and  man- 
agement representatives,  who  may  or  may  not  be  from  the  shop 
involved. 


553]  UNION  JOINT  COUNCILS  IN  THE  UNITED  STATES        .         149 

The  fact  that  many  subjects,  including  the  most  important 
phases  of  industrial  relations,  are  covered  in  trade  agreements 
greatly  limits  the  scope  of  these  local  union  joint  committees.  No 
instance  has  been  found  of  any  functions  being  assigned  to  these 
local  bodies  other  than  those  of  carrying  on  their  regular  union 
duties  of  collecting  dues,  etc.,  and  their  principal  duty  of  handling 
all  matters  needing  adjustment.  The  latter  provision,  however,  is 
seldom  qualified  in  any  way;  so  it  may  be  a  very  broad  function. 
It  means  that  these  local  bodies  may  perform  important  judicial 
and  executive  functions  in  interpreting  and  applying  all  the  pro- 
visions of  the  elaborate  trade  agreements  described  above. 

3.  Constructive  National  Joint  Councils.  A  third  phase  of  joint 
industrial  management  by  unions  and  employers  is  the  work  of 
certain  national  or  international  joint  councils,  whose  primary 
purpose  is  not  the  making  of  trade  agreements. 

The  international  joint  industrial  council,  composed  of  five  rep- 
resentatives of  the  International  Photo-Engravers'  Union  and  five 
of  the  American  Photo-Engravers'  Association,  was  formed  in 
1919.  The  objects  of  this  council,  as  set  forth  in  the  constitution, 
are  as  follows: 

"To  establish  and  promote  the  spirit  of  cooperation  and  of 
mutual  helpfulness,  to  deal  successfully  with  the  problems  of  the 
photo-engraving  industry,  and  to  insure  the  protection  and  pro- 
mote the  interests  of  all  concerned,  it  is  deemed  essential  to  create 
and  there  is  hereby  established  a  joint  industrial  council  of  the 
representatives  of  the  American  Photo-Engravers'  Association  and 
the  International  Photo-Engravers'  Union,  which  shall  be  thor- 
oughly informed  as  to  the  condition  and  interests  of  all  engaged 
in  the  industry,  and  shall  suggest  for  ratification,  from  time  to 
time,  policies  and  regulations  which  shall  eventually  become  the 
law  of  the  photo-engraving  industry."1 

Further  in  the  constitution  these  specific  functions  of  the  council 
are  given: 

i.  Outlining  of  general  trade  policies  which  will  secure  the 
greatest  degree  of  cooperation  between  employer  and  employee. 

Woll,  Matthew,  "Standardization  and  Cooperation  in  the  Printing  Industry," 
pamphlet  reprinted  from  The  Proceedings  of  the  Academy  of  Political  Science  in 
the  City  of  New  York,  Vol.  IX,  No.  4,  January,  1922,  p.  6. 


150    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [554 

2.  Inducing  all  employers  and  employees  to  join  their  respective 
local  and  international  associations  and  to  form  local  joint  indus- 
trial councils. 

3.  Considering,  reporting,  and  advising  on  any  legislation  af- 
fecting the  trade,  and  presenting  the  needs  of  the  industry  to  the 
government. 

4.  Encouraging  and  fostering  research  and  invention,  and  pub- 
lishing the  results,  when  desirable. 

5.  Considering,  reporting,  and  advising  on  all  improvements  in 
organization,  appropriate  questions  relating  to  management,  and 
the  examination  of  industrial  experiments  with  special  reference 
to  cooperation  in  carrying  new  ideas  into  effect;  studying  and 
proposing  suitable  methods  of  selection  for  apprenticeship,  tech- 
nical training  for  apprentices,  and  improving  the  general  stand- 
ards of  workmanship;  considering  and  settling  of  disputes,  when 
such  disputes  are  referred  to  it;  removing  dangers  to  health  and 
safeguarding  the  physical  well-being  of  employees;   considering 
any  and  all  matters  of  general  interest  to  the  trade. 

Since  this  council  is  able  only  to  advise  and  recommend,  local 
joint  industrial  councils  have  been  formed  to  carry  out  the  policies 
formed  by  the  international  joint  industrial  council. 

When  this  council  was  formed  in  1918,  the  printing  industry 
was  in  serious  straits.  "Competition  in  business  was  unfair,  prices 
were  steadily  declining,  the  cost  of  production  was  increasing,  and 
there  was  complete  absence  of  standardized  methods  of  estimating 
the  service  rendered.  Business  failure  appeared  as  the  unescap- 
able  path  for  the  industry."2  It  was  at  this  point  that  the  employ- 
ers and  the  unions  agreed  to  cooperate.  The  first  task  undertaken 
was  that  of  establishing  a  trade  standard.  Matthew  Woll  very 
ably  describes  the  success  attained.  He  says: 

"With  complete  organization  effected  on  the  part  of  both  em- 
ployers and  workmen,  a  joint  investigation  was  conducted  into 
the  cost  of  producing  photo-engravings.  A  chart  was  prepared, 
based  upon  the  findings  of  this  cost  investigation.  By  this  method 
of  cooperation,  a  trade  standard  was  established  in  the  industry 
in  a  few  months'  time — a  task  which  employers  of  themselves  had 

2Woll,  Matthew,  "Standardization  and  Cooperation  in  the  Printing  Industry," 
Proceedings  of  the  dnnals  of  the  American  Academy  of  Political  and  Social  Sci- 
ence, Vol.  IX,  No.  4,  January,  1922,  p.  37. 


555]  UNION  JOINT  COUNCILS   IN  THE  UNITED  STATES  151 

failed  to  accomplish  for  years.  Instead  of  facing  bankruptcy  the 
industry  was  now  placed  on  a  stable  and  prosperous  basis. 

"Then,  too,  the  interest  of  the  public  was  being  better  served  by 
these  standards.  Unfair  trade  practices  were  discouraged,  all 
purchasers  of  photo-engravings  were  placed  on  an  equal  plane, 
and  prices  were  no  longer  determined  by  vicious  competitive 
practices  and  underselling  methods  which  had  no  relation  to,  or 
regard  for,  costs  of  production  or  the  safeguarding  of  the  industry; 
the  prices  thereafter  were  determined  on  the  modern  businesslike 
basis  of  cost  of  production."3 

As  a  result  of  this  successful  cooperation,  the  joint  conferences 
were  established  upon  a  permanent  basis  by  creating  a  joint  in- 
dustrial council  with  a  constitution  and  permanent  personnel.  A 
provision  was  made  that  this  council  should  hold  regular  meet- 
ings. At  its  first  meeting,  it  provided  for  an  extensive  investiga- 
tion into  the  problem  of  the  supply  and  training  of  apprentices. 
This  investigation  revealed  much  need  for  standardization.  "It 
was  immediately  recognized  that  the  proper  training  of  apprentices 
was  not  an  individual,  but  a  collective  responsibility,  that  it  was 
unfair  for  one  employer  to  exploit  apprentice  labor,  turn  out  in- 
competent journeymen,  and  thereafter  have  incompetent  workers 
exploit  all  other  employers."* 

Due  to  the  efforts  of  the  joint  committee,  there  has  been 
adopted  a  uniform  standard  ratio  of  apprentices  that  will  provide 
an  adequate  supply  of  workmen  for  the  rapidly  expanding  trade. 

The  next  task  undertaken  by  this  council  was  that  of  establish- 
ing a  uniform  cost-accounting  system  that  would  serve  as  a  basis 
for  estimating  costs  of  production,  and  make  the  standardization 
of  prices  possible.  Great  obstacles  have  been  met  in  this  field,  but 
at  present  the  joint  council  is  at  work  devising  a  cost-finding  and 
accounting  system,  which  it  hopes  to  enforce  throughout  the  entire 
industry.  The  predominating  element  in  this  industry  being  labor, 
accurate  and  scientific  cost-finding  depends  largely  upon  hearty 
cooperation  on  the  part  of  the  workmen.  By  attacking  the  prob- 
lem through  the  medium  of  the  joint  industrial  council,  the  good 
will  and  cooperation  of  the  workmen  have  been  gained. 

*Ibid.,  pp.  37,  38. 
'Ibid.,  p.  39. 


152    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [556 

This  council  has  also  attempted  to  reduce  the  number  of  special- 
ized branches  which  have  developed  in  the  photo-engraving  in- 
dustry, and  to  establish  more  uniform  methods  and  training. 
Under  more  uniform  methods  and  training,  employers  will  have 
less  trouble  in  getting  capable  workers,  and  the  workers  will  have 
less  trouble  in  rinding  work  in  new  communities. 

Another  task  recently  undertaken  by  this  council  is  an  investi- 
gation into  the  problem  of  shop  practices,  with  the  purpose  of 
eliminating  any  evils  discovered.  A  jointly  conducted  publicity 
campaign  is  also  in  progress.  Its  purpose  is  familiarizing  "the 
users  of  the  photo-engraving  service  with  the  many  complexities 
and  artistic  requirements  of  the  trade,  so  as  to  eliminate  many  of 
the  misunderstandings  that  arise  between  the  buyers  and  pro- 
ducers of  engravings,  because  of  their  lack  of  knowledge  of  the 
intricacies  of  the  trade."5 

This  council  is  now  making  plans  to  establish  a  joint  research 
bureau  which  will  investigate  improved  methods  and  processes 
of  production,  methods  of  eliminating  waste,  and  other  ways  and 
means  to  promote  efficiency  and  enable  the  industry  to  expand. 

This  is  an  unusual  record  of  accomplishments.  Considering  the 
short  time  that  this  policy  of  cooperation  through  joint  councils 
has  been  in  use,  it  would  seem  to  bear  out  the  most  extravagant 
claims  that  have  been  made  for  the  joint  council  system. 

A  second  example  of  a  union  national  joint  industrial  council  in 
the  United  States  is  found  in  the  international  joint  conference 
council  of  the  Commercial  and  Periodical  Branches  of  the  Printing 
Industry.  The  following  bodies  constitute  the  membership  of  this 
conference  council: 

Employers  Employees 

Closed  Shop  Branch,  United  International  Typographical  Union. 

Typothetae  of  America.  International  Printing  Pressmen 

Printers'  League  of  America.  and  Assistants'  Union. 

International  Association  of  International  Brotherhood  of 

Electrotypers.  Bookbinders. 

International  Stereotypers'  and 
Electrotypers'  Union. 

This  international  conference  is  composed  of  eight  members, 
four  being  chosen  from  the  employers'  association,  and  four  from 
the  labor  organizations. 

'Ibid.,  p.  41. 


557]  UNION   JOINT  COUNCILS  IN  THE  UNITED  STATES  153 

The  scope  of  work  that  this  council  may  carry  on  is  the  same  as 
that  provided  for  the  council  of  the  Photo-Engravers.  In  fact,  the 
principal  features  of  both  plans  are  the  same;  however,  the  chief 
work  of  this  council  is  in  connection  with  matters  of  policy. 

The  work  of  this  council  has  been  very  similar  to  that  of  the 
Photo-Engravers'  council.  Among  the  matters  upon  which  this 
council  has  done  constructive  work  are  the  following:  a  cost-find- 
ing system  for  the  printing  industry;  training  of  apprentices; 
standardization  of  trade  agreements,  and  shop  practices;  estab- 
lishing local  machinery  for  informal  and  frank  discussion  of  prob- 
lems by  employers  and  employees;  adoption  of  cardinal  principles 
to  guide  wage  negotiations;  making  a  standard  arbitration  agree- 
ment; introduction  of  the  forty-four  hour  week;  and  a  standard 
"cost  of  living  readjustment"  clause  for  all  local  trade  agree- 
ments. 

A  third  example  of  a  union  national  joint  industrial  council  in 
the  United  States  is  the  Electrical  Construction  Industry. 

The  National  Association  of  Electrical  Contractors  and  Dealers 
held  its  1919  convention  in  Milwaukee;  and  the  International 
Brotherhood  of  Electrical  Workers  held  its  1919  convention  in 
New  Orleans.  At  each  of  these  conventions  five  representatives 
were  appointed.  These  ten  representatives  composed  a  joint  com- 
mittee for  finding  some  means  of  putting  "the  principles  of  co- 
operation into  practice."  This  joint  committee  met  in  January, 
1920,  and  formed  and  presented  to  the  respective  organization  a 
recommendation  "that  a  national  joint  body  be  created."  This 
recommendation  was  accepted  and  a  national  joint  council  was 
held  in  Washington,  April  20,  1920. 

The  purpose  of  this  council,  called  "The  Council  on  Industrial 
Relations  for  the  Electrical  Construction  Industry  in  the  United 
States  and  Canada,"  is  described  in  the  Declaration  of  Principles 
drawn  up  at  the  first  meeting  of  the  committees  from  each  organ- 
ization, and  in  a  resolution  adopted  at  the  second  meeting  of  the 
council: 

"The  vital  interests  of  the  Public  and  of  Employee  and  Em- 
ployer in  industry  are  inseparably  bound  together.  All  will  benefit 
by  a  continuous  peaceful  operation  of  the  industrial  process  and 
the  devotion  of  the  means  of  production  to  the  common  good. 


154    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [558 

"The  facilities  of  the  electrical  industry  for  service  to  the  public 
will  be  developed  and  enhanced  by  recognition  that  the  over- 
lapping of  the  functions  of  the  various  groups  in  the  industry  is 
wasteful  and  should  be  eliminated. 

"Close  contact  and  a  mutually  sympathetic  interest  between 
employee  and  employer  will  develop  a  better  working  system, 
which  will  tend  constantly  to  stimulate  production  while  improv- 
ing the  relationship  between  employee,  employer,  and  the  com- 
munity. 

"Strikes  and  lock-outs  are  detrimental  to  the  interests  alike  of 
employee,  employer,  and  the  public,  and  should  be  avoided. 

"Agreements  or  understandings  which  are  designed  to  obstruct 
directly  or  indirectly  the  free  development  of  trade,  or  to  secure 
for  special  groups  special  privileges  and  advantages,  are  sub- 
versive to  the  public  interest  and  cancel  the  doctrine  of  equality 
of  rights  and  opportunity,  and  should  be  condemned. 

"The  public  interest  is  conserved,  hazard  to  life  and  property  is 
reduced,  and  standards  of  work  are  improved  by  fixing  an  ade- 
quate minimum  of  qualifications  in  knowledge  and  experience,  as 
a  requirement  precedent  to  the  right  of  an  individual  to  engage 
in  the  electrical  construction  industry,  and  by  the  rigid  inspection 
of  electrical  work,  old  and  new. 

"Public  welfare,  as  well  as  the  interests  of  the  trade,  demands 
that  electrical  work  be  done  by  the  electrical  industry. 

"Cooperation  between  employee  and  employer  acquires  con- 
structive power  as  both  employees  and  employers  become  more 
completely  organized. 

"The  right  of  employees  and  employers  in  local  groups  to  es- 
tablish local  wage  scales  and  local  working  rules  is  recognized,  and 
nothing  herein  is  to  be  construed  as  infringing  on  that  right."6 

There  is  also  significance  in  the  following  declaration  of  the 
"broad  purposes  of  the  council": 

"Whereas  it  is  the  primary  purpose  of  the  two  Member  Organ- 
izations to  remove  the  causes  of  friction  and  dispute,  the  Council 
conceives  its  principal  function  to  be  that  of  study  and  research 
to  the  end  that  it  may  act  with  the  fullest  knowledge  of  the 
causes,  and  that  it  may  secure  the  largest  possible  measure  of 

"Pamphlet,   The   Council  on  Industrial  Relations  for  the  Electrical  Construc- 
tion Industry,  New  York  City,  1921,  pp.  3,  4. 


559]  UNION   JOINT  COUNCILS  IN  THE  UNITED  STATES  155 

genuine  cooperation  between  the  Member  Organizations  and  gen- 
erally between  employers  and  employees,  for  the  development  of 
the  industry  as  a  servant  to  society  and  for  the  improvement  of 
the  conditions  of  all  engaged  in  the  industry. 

"That  the  Council  earnestly  urges  upon  the  Member  Organiza- 
tions and  each  constituent  body  of  them,  that  reasonableness, 
patience,  good  will,  and  a  serious  endeavor  to  see  the  merits  and 
justice  of  claims  put  forward  by  the  other  party,  which  in  this,  as 
in  all  other  efforts  of  men  to  substitute  harmony  for  strife,  are  an 
indispensable  foundation  for  cooperative  effort,  without  which  the 
council  cannot  achieve  success  in  its  purpose."7 

At  this  second  meeting,  it  was  decided  also  that  the  council 
would  be  composed  of  five  representatives  appointed  by  each  of 
the  Member  Organizations,  each  Member  Organization  appointing 
alternately  each  year  two  representatives  and  three  represent- 
atives all  to  serve  two  years  and  until  their  successors  are  ap- 
pointed. These  representatives  act  on  the  council  without  com- 
pensation. 

It  is  provided  in  the  constitution  of  this  council  that  it  will  settle 
disputes  only  when  all  existing  machinery  has  failed.  But  the 
settling  of  disputes  seems  to  have  been  the  principal  work  carried 
on  by  this  council.  "Services  have  been  rendered  in  considerably 
over  one  hundred  cases,  in  which  favorable  adjustment  has  been 
realized  by  the  council  sitting  as  a  tribunal  and  by  informal 
methods  ....  In  every  case  of  informal  adjustment  a  reason- 
able degree  of  satisfaction  to  both  parties  to  the  dispute  has  been 
the  result."8 

Another  point  worthy  of  mention  is  that  this  council  has  suc- 
ceeded in  developing  a  spirit  of  good  will  and  cooperation  between 
the  men  and  the  employers.  The  importance  of  this  can  hardly  be 
overestimated,  for  good  will  is  the  basis  of  cooperation,  and  co- 
operation is  the  basis  of  increased  efficiency.  L.  K.  Comstock, 
president  of  the  L.  K.  Comstock  Co.,  New  York,  reports  that 
"the  representatives  of  the  employers  and  the  unions,  by  getting 
together  in  an  informal  way  around  the  table  and  discussing 

''Ibid.,  p.  10. 

'Comstock,  L.  K.,  "Joint  and  National  Counseling  in  the  Electrical  Con- 
struction Industry,"  Proceedings  of  The  Annals  of  the  American  Academy  of 
Political  and  Social  Science,  January,  1922,  pp.  79,  8l. 


156    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [560 

frankly  without  heat  or  passion  the  many  perplexing  problems 
in  which  both  groups  are  vitally  interested,  have  developed  an 
industrial  good  will  and  respect  for  one  another's  opinions,  which 
are  of  material  assistance  in  laying  the  foundation  for  better  in- 
dustrial relations  throughout  the  whole  industry."  Their  method  is 
the  joint  investigation  of  the  facts,  and  the  working  out  of  the 
elaboration  of  a  constructive  industrial  program  on  the  basis  of  the 
facts.9 

However,  the  council  is  planning  more  constructive  work.  It  is 
working  now  for  a  national  agreement  that  will  standardize  con- 
ditions in  the  industry.  "The  Council  proposes  for  itself  the  task 
of  studying  the  whole  question  of  apprenticeship,  advancement, 
education,  and  qualification  of  local  restriction  placed  upon  the 
use  of  traveling  cards,  or  waiting  and  traveling  time,  and  of  re- 
sponsibility for  defective  work."10 

The  three  national  joint  industrial  councils  in  the  printing  and 
electrical  industries  in  the  United  States  are  similar  in  form,  pur- 
pose, and  procedure,  to  the  national  joint  industrial  conference  of 
the  Whitley  type  in  England.  They  are,  like  the  Whitley  councils, 
based  upon  unions  and  employers'  associations.  They  are  assigned 
constructive  functions,  and  have  a  permanent  personnel,  a  con- 
stitution, and  provision  for  regular  meetings. 

The  record  of  the  activities  of  these  American  councils  shows 
that  those  in  the  printing  industries  have  confined  their  activities 
more  largely  to  constructive  work  than  have  the  Whitley  councils 
in  England.  However,  in  the  council  of  the  electrical  industry, 
the  work  of  settling  disputes  has  predominated  to  a  greater  extent 
than  in  either  the  printing  councils  or  the  English  councils.  The 
Whitley  councils  have  devoted  much  more  time  to  deciding  wage 
scales,  questions  of  hours,  and  conditions  of  work,  than  have  these 
American  national  joint  councils. 

These  national  joint  councils  have  certain  important  character- 
istics in  common.  In  each  case  there  has  been  a  frank  recognition 
of  the  union  by  the  employers.  The  employers  have  apparently 
declared  their  intention  of  dealing  regularly  with  the  unions. 
Peace  has  been  declared. 

•Ibid.,  p.  83. 
"Ibid.,  p.  82. 


561]  UNION   JOINT  COUNCILS  IN  THE  UNITED  STATES  157 

The  importance  of  this  attitude  can  hardly  be  overestimated, 
for  it  has  long  been  the  contention  of  the  finer  class  of  union 
leaders  that  organized  labor  is  always  willing  and  anxious  to  co- 
operate constructively  with  the  employer,  but  that  such  coopera- 
tion has  been  impossible  where  the  employer  has  waged  incessant 
warfare  on  the  union.  Moreover,  it  is  urged  that  when  the  unions 
must  fight  for  recognition,  the  fighters,  rather  than  the  construc- 
tive thinkers  among  their  members,  will  hold  the  positions  of 
leadership;  and  that  a  constructive  leadership  can  be  developed 
only  when  there  is  frank  union  recognition. 

These  joint  councils  of  the  printing  and  electrical  industries  are 
testing  these  claims  of  organized  labor.  They  are  based  upon 
frank  and  continuous  union  recognition,  as  a  platform  of  con- 
structive cooperation. 

The  work  of  the  two  councils  in  the  printing  industries  justifies 
the  conclusion  that  there  are  tremendous  possibilities  in  the  joint 
council  plan.  These  councils  have  undertaken  and  accomplished 
results  that  could  not  have  been  accomplished  without  a  large 
measure  of  joint  cooperative  effort.  They  have  already  been 
active  in  connection  with  practically  all  of  the  functions  outlined 
for  them  in  their  constitutions,  and,  in  many  instances,  have  ac- 
complished notable  results. 

The  pronounced  success  of  these  union  councils  must  be  con- 
sidered by  those  opponents  of  trade  unionism  who  have  urged 
the  formation  of  a  local  non-union  type  of  joint  council,  on  the 
basis  that  unionism  necessarily  brings  class  struggle,  distrust,  and 
inefficiency,  while  the  local  non-union  council  brings  constructive 
cooperation.  The  councils  in  the  printing  and  electrical  industries 
have  shown  quite  conclusively  that  when  employers  are  willing 
to  recognize  and  deal  frankly  with  the  unions  on  some  permanent 
and  continuous  basis,  and  show  toward  the  organized  workers 
sympathetic  good  will  and  a  sincere  desire  to  cooperate,  those 
workers  will  respond  with  a  similar  spirit  of  good  will  and  a  desire 
to  cooperate. 

B.  SUMMARY  AND  CONCLUSIONS 

The  foregoing  discussion  has  afforded  the  basis  for  certain  im- 
portant conclusions  respecting  the  council  movement.  In  the  first 
place,  it  has  substantiated  the  claim  of  the  trade  unions,  that  they 
have  obtained  a  large  measure  of  democratic  industrial  control 


158    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [562 

through  national,  district,  and  local  councils,  composed  of  repre- 
sentatives of  the  employers  and  the  workers.  There  is  no  justi- 
fication for  the  tendency  of  some  writers  to  distinguish  between 
so-called  "industrial  democracy"  plans  and  collective  bargaining 
through  unions,  with  the  implication  that  these  non-union  council 
plans  achieve  real  democratic  industrial  management;  and  col- 
lective bargaining,  as  carried  on  by  unions,  does  not.  On  the  con- 
trary, the  unions  have  dealt  with  the  same  vital  problems  of  in- 
dustrial management  as  have  non-union  councils;  they  have  dealt 
with  them  in  essentially  the  same  manner;  and  have,  on  the 
whole,  exercised  a  more  authoritative  voice  respecting  these 
matters.  Moreover,  the  total  accomplishments  of  non-union  coun- 
cils have  been  insignificent  in  comparison  to  the  accomplishments 
of  the  unions. 

The  procedure  in  the  two  cases  is  essentially  the  same.  There 
is  no  magic  in  a  non-union  works  council  plan  which  can  remove 
the  conflict  of  interests  that  exists  between  the  employers  and  the 
workers.  If  the  non-union  council  plan  truly  affords  a  measure 
of  democratic  industrial  management,  it  will  function  in  regard 
to  controversial  matters,  such  as  wages,  hours,  conditions,  dis- 
charge, shop  rules,  and  the  like,  just  the  same  as  do  representative 
joint  councils  that  form  union  trade  agreements,  or  the  local  joint 
councils  that  interpret  and  enforce  such  agreements.  In  any  case, 
there  will  be  conflicting  interests,  and  the  representatives  of  each 
party  will  strive  to  serve  the  interests  of  his  constituency. 

A  second  conclusion  which  may  be  drawn,  is  that  where  em- 
ployers frankly  recognize  and  deal  with  the  unions  on  a  perma- 
nent basis  and  in  good  faith,  joint  councils  may  be  established, 
wherein  constructive  cooperation  may  be  realized.  The  success 
of  the  Whitley  councils  in  England  constitutes  valuable  evidence 
upon  this  point. 

The  issue,  then,  between  the  unions  and  the  local  non-union 
councils  might  be  fairly  stated  thus:  Shall  there  be  democratic 
industrial  management  by  national,  district,  and  local  joint  coun- 
cils, composed  of  representatives  on  the  workers'  side,  elected  by 
the  workers  in  the  industry,  district,  and  plant  or  shop  respective- 
ly; or  shall  there  be  democratic  industrial  management  by  local 
plant  or  shop  councils  unrelated  to  other  sections  of  the  industry? 
The  discussion  of  this  issue  is  reserved  to  the  following  chapter. 


CHAPTER  VI 
TRADE  UNIONS  VERSUS  THE  NON-UNION  COUNCILS 

To  a  considerable  degree,  the  non-union  local  works  councils  in 
the  United 'States  and  the  unions  represent  two  antagonistic  and 
competing  movements.  Many  of  the  non-union  councils  are  or- 
ganized, either  to  avoid  dealing  with  existing  unions,  or  to  prevent 
the  union  organization  getting  a  foothold  among  the  men.  The 
latter  is  the  more  general  situation. 

The  evidence  sometimes  offered  to  show  that  the  non-union 
council  movement  is  not  antagonistic  to  the  unions  is  the  clause 
that  appears  in  most  of  the  constitutions  of  council  plans,  to  the 
effect  that  no  discrimination  shall  be  made  against  any  worker 
for  belonging  to  any  labor  organization.  A  typical  example  of 
these  provisions  is:  "There  shall  be  no  discrimination  under  this 
plan  against  any  employee  because  of  race,  sex,  political  or  reli- 
gious affiliation,  or  membership  in  any  labor  or  other  organiza- 
tion." A  number  of  provisions  add  the  clause,  "or  for  non-mem- 
bership in  union,  fraternity,  or  other  organization."  Some  plans 
have  the  briefer  provision  that  employees  are  not  deprived  of  the 
right  to  belong  to  a  labor  organization. 

However,  it  is  difficult  to  see  how  these  provisions  constitute 
any  conclusive  evidence  that  the  non-union  councils  are  not  antag- 
onistic to  the  unions.  These  provisions  exist  in  most  plans,  with- 
out question.  There  is  no  evidence  at  hand  to  show  that  they  are 
not  strictly  complied  with  by  the  employers.  But  when  all  that  is 
admitted,  there  is  still  no  evidence  to  show  that  these  firms  will 
deal  with  the  unions,  or  that  when  forming  their  council  plans,  they 
have  not  been  hoping  that  these  plans  would  result  in  the  men's 
dropping  out  of  the  union  or  refusing  to  join  one.  These  provi- 
sions are  simply  safeguards  to  individual  workers  that  they  will 
not  be  treated  differently  from  other  employees  because  they  do 
belong  to  a  union. 

The  second  argument  frequently  offered  is  that  many  union 
men  have  served  efficiently  as  representatives  on  these  works 
councils.  But  merely  because  individual  union  men  have  approved 
of  these  plans  and  have  cooperated  in  them  and  their  unions  have 
not  refused  to  permit  them  to  do  so,  is  no  evidence  that  such 
works  councils  are  not  organized  with  the  purpose  of  injuring 
unions,  or  that  they  are  not  accomplishing  that  purpose.  On  the 

159 


160    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [564 

other  hand,  there  is  considerable  evidence  that  these  non-union 
councils  have  been  organized  in  many  cases  with  the  purpose  of 
gaining  permanent  localized  collective  bargaining  within  the  plant 
or  works. 

Jett  Lauck,  who  had  extensive  experience  with  shop  committees 
when  serving  as  Secretary  of  the  War  Labor  Board,  refers  to  the 
non-union  council  movement  in  the  following  terms : 

"A  large  group  of  employers  are  trying  to  evade  union  recogni- 
tion by  the  formation  of  shop  committees  and  the  application  of 
various  local  schemes  of  employee  representation."1 

Paul  Studensky,  who  made  a  study  of  council  plans  for  the  New 
Jersey  State  Chamber  of  Commerce,  admits  that  the  movement  is 
partly  an  effort  to  "forestall  the  unionization  of  the  workers."2 

William  Leiserson,  former  Impartial  Chairman  for  the  Ro- 
chester Clothing  Market,  declares  that  "no  employer  who  is  frank 
will  deny  that  in  adopting  shop  committees,  he  is  trying  to  avoid 
dealing  with  unions."3 

Ordway  Tead,  a  prominent  industrial  engineer,  testifies  that  the 
honest  conviction  of  many  employers  who  are  announcing  plans  of 
employee  representation  is  expressed  in  the  statement,  "If  I  give 
my  workers  a  voice  in  control,  there  will  be  no  place  for  any  out- 
side organization."4 

R.  C.  Newcomb,  superintendent  of  the  Deane  Works,  Worth- 
ington  Pump  and  Machine  Corporation,  says  that  industrial 
democracy  is  "usually  offered  as  an  antidote  for  trade  unionism."5 

An  official  of  the  Virginia  Bridge  and  Iron  Co.,  in  his  reply 
to  the  questionnaire  sent  out  in  the  course  of  this  study,  states  that 
"forming  a  shop  committee  was  done  in  a  sincere  effort  to  coun- 
teract the  baneful  and  destructive  eifects  both  in  morale  and  pro- 
duction of  constant  agitation  from  sources  outside  the  employees 
themselves,  such  agitation  being  almost  wholly  of  imported  union 
inception." 

*Thf  Annals  of  the  American  Academy  of  Political  and  Social  Science,  Vol. 
90,  July,  1920,  p.  94. 

*"  'New  Jersey,'  Shop  Committees  and  Industrial  Councils,"  Report  of  the 
Birre&u  of  State  Research,  Vol.  VI,  No.  10,  July,  1919,  p.  3. 

*The  Annals  of  the  American  Academy  of  Political  and  Social  Science,  Vol. 
XCI,  September,  1920,  p.  2. 

4New  Republic,  Vol.  19,  June,  1919,  p.  241. 

'Iron  Trade  Review,  Vol.  66,  February,  1920,  p.  565. 


565]  TRADE  UNIONS  VERSUS  THE  NON-UNION  COUNCILS  l6l 

The  personnel  director  of  a  large  concern  in  Chicago  recently 
stated  quite  frankly  to  the  writer  that  the  employers  in  his  in- 
dustry did  not  wish  to  deal  with  the  unions,  and  had,  therefore, 
organized  joint  works  council  plans. 

In  the  course  of  this  study,  the  writer  has  had  many  inter- 
views and  much  correspondence  with  employment  managers,  per- 
sonnel directors,  and  company  officials  in  plants  having  employee 
representation  plans.  The  most  typical  attitude  toward  unions 
that  has  been  found  among  such  men,  is  as  follows : 

"We  do  not  oppose  the  union,  as  such.  We  concede  to  the  work- 
man the  right  to  organize.  We  believe  the  union  can  carry  on 
many  important  functions  which  no  other  type  of  organization 
can  perform.  But  the  unions  have  fallen  into  disrepute  with  us 
and  the  public,  and  made  it  impossible  for  us  to  deal  with  them. 
Due  to  the  fact  that  the  modern  union  must  charge  substantial 
dues,  and  that  the  workman  will  not  pay  such  dues  unless  his 
interest  in  the  union  is  kept  at  a  high  pitch,  the  leaders  of  the 
unions  have  been  compelled  to  be  continually  forcing  an  issue, 
either  by  demanding  more  favorable  terms,  or  fighting  proposed 
changes  in  the  terms  of  the  labor  contract.  To  hold  the  union 
together  and  to  expand  it,  have  necessitated  placing  in  power  the 
fire-eating,  agitating  type  of  leaders,  who  can  and  will  keep  up 
the  fighting  spirit,  and  keep  loyalty  to  the  union  strong. 

"These  leaders  have  made  cooperation  and  successful  collective 
bargaining  through  unions  impossible  from  one  point  of  view,  be- 
cause they  dare  not  permit  prolonged  periods  of  peace.  They 
cannot  cooperate;  but  must  pick  a  fight  in  order  to  save  their 
lucrative  and  easy  riding  positions.  But  this  continuous  fight  en- 
genders class  hatred,  ill  will,  and  bitterness.  The  result  is  in- 
efficiency. Our  efforts  at  scientific  personnel  management  are 
rendered  futile,  because  the  necessary  good  will  and  cooperation  of 
the  workers  are  absent. 

"Therefore,  while  we  concede  the  right  of  organization  to  the 
workers,  and  approve  collective  bargaining,  we  are  trying  to  re- 
place the  union  with  another  type  of  organization  that  will  not 
charge  dues  and  will  not  need  to  keep  up  interest  in  order  to 
collect  them,  and  which  will  not  have  salaried  leaders  whose  posi- 
tion and  salary  depend  upon  successful  agitation  and  continuous 
industrial  warfare. 


162    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [566 

"Under  this  new  localized  form  of  organization  and  collective 
bargaining,  we  have  found  the  men  reasonable  beyond  our  fondest 
expectations.  Also  constructive  cooperation  and  increased  effi- 
ciency have  at  last  become  possible.  The  results  are  beneficial 
to  the  public  and  the  worker,  as  well  as  to  ourselves." 

The  most  valuable  evidence  collected  in  the  course  of  this  in- 
vestigation regarding  the  purpose  of  employers  in  organizing  non- 
union council  plans  has  been  obtained  only  upon  confidential 
terms,  and  cannot  be  presented.  It  must  suffice  to  state  that  the 
conclusion  herein  reached  is  that  the  majority  of  non-union  coun- 
cil plans  have  been  organized  either  to  undermine  existing  unions, 
or  to  avoid  what  has  been  regarded  as  the  otherwise  inevitable 
coming  of  collective  bargaining  with  unions.  This  statement  does 
not  deny  the  existence  of  other  important  purposes. 

Evidence  of  the  effect  that  non-union  councils  have  had  upon 
the  unions  has  also  been  difficult  to  obtain.  Many  of  the  inquir- 
ies sent  out  upon  this  topic  were  ignored.  However,  these  facts 
have  been  obtained: 

The  Traub  Manufacturing  Co.  has  a  non-union  joint  works 
council  in  its  plant.  E.  E.  Bross,  president  and  general  manager 
of  the  company,  states: 

"No  objection  to  our  men  maintaining  membership  in  the 
union  is  offered,  but  they  have  all  dropped  out  of  their  own  accord. 
I  have  known  agitators  to  come  to  the  plant  and  ask  for  a  man 
by  name,  and  that  man  returned  word  that  he  was  working  and 
did  not  have  time  to  see  him.  Just  recently  a  man  from  New 
York  tried  to  incite  a  sympathetic  strike  among  our  men.  We 
paid  no  attention  to  him,  and  the  men  refused  to  have  anything 
to  do  with  him."6 

William  McKenzie,  president  and  manager  of  the  Crookston 
Times  Printing  Co.,  in  discussing  the  success  of  their  council  plan, 
says: 

"One  day  toward  the  end  of  the  month  we  were  honored  by  a 
visit  from  a  walking  delegate.  He  wanted  to  organize  the  shop. 
He  met  a  chilly  reception.  'Why  should  we  organize  a  union?'  he 
was  asked.  'We  are  already  organized.  We  have  a  union  now 
that  is  giving  us  everything  we  could  ask  for,  a  partnership  in  the 

'Factory,  Vol.  25,  August  15,  1920,  p.  538. 


567]  TRADE   UNIONS  VERSUS  THE  NON-UNION  COUNCILS  163 

business,  a  voice  in  its  management,  and  a  share  in  its  profits.' 
The  organizer  saw  there  was  not  a  chance  in  the  world  for  him  in 
that  situation  and  left  in  a  very  short  time."7 

The  following  experience  is  reported  in  connection  with  the 
Printz-Biederman  Company's  works  council  plan: 

"The  Printz-Biederman  Company  had  an  open  shop,  although 
many  of  the  employees  were  union  members.  In  September,  1915, 
the  Garment  Makers'  Union  decided  to  unionize  Cleveland  and 
to  start  with  this  shop.  The  employees  heard  of  the  intention 
through  the  newspapers;  the  Senate  and  the  House  passed  a  reso- 
lution and  it  was  ratified  by  the  general  mass  meeting.  Here  is  the 
resolution: 

'  'Whereas  the  articles  appearing  in  the  'Plain  Dealer'  under 
this  date  and  attached  hereto  conveys  a  false  impression  concern- 
ing the  working  conditions  in  our  factory  and  further  indicates 
our  plant  as  the  object  of  an  unjust  attack;  we,  the  employees  in 
the  House  of  Representatives,  and  Senate,  specially  assembled 
this  third  day  of  September: 

"  'Resolved,  that  the  action  of  the  Printz-Biederman  Co.,  in  giv- 
ing us  for  the  past  two  years  such  full  authority  to  change  any 
and  all  working  conditions  in  our  plant,  is  fully  appreciated  by 
the  whole  body  of  employees,  numbering  about  1,000  people  and 
it  is 

"  'Resolved,  that  we,  the  employees  of  the  Printz-Biederman  Co., 
hereby  express  our  strong  disapproval  of  the  action  taken  by  an 
outside  organization  as  shown  in  the  proposed  demand  referred 
to  in  this  newspaper  article,  and  be  it  further 

"  'Resolved,  that  we  tender  to  our  company  our  most  earnest 
and  sincere  support  for  the  present  most  fair  methods  of  conduct- 
ing the  business.' 

"If  we  knew  any  stronger  language  of  expressing  our  full  satis- 
faction, we  would  use  it. 

CHAIRMAN,  House  of  Representatives. 
PRESIDENT,  Senate.' 

"The  union  never  presented  a  demand.  The  agitators  left  town 
that  night."8 

'System,  Vol.  37,  April,  1920,  p.  753. 
"Leitch,  John,  Man  to  Man,  p.  191. 


164    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [568 

In  answer  to  the  questionnaire,  the  Walworth  Manufacturing 
Co.  reports  that  when  it  adopted  its  works  council  plan,  80% 
of  its  men  belonged  to  unions,  but  now  about  20%  are  mem- 
bers. The  Virginia  Bridge  and  Iron  Co.  makes  a  similar  report.  At 
the  time  of  the  adoption  of  its  plan,  90%  of  its  men  belonged 
to  unions,  but  now  only  2%  are  members.  Another  firm  makes 
the  statement  that  75%  of  its  men  were  in  unions  when  its 
council  plan  was  adopted,  but  now  25%  belong. 

A  letter  received  from  John  P.  Frey,  Editor  of  the  International 
Molders'  Journal,  contains  the  following  significant  statement: 

"Replying  to  question  number  4,  so  far  as  our  observation  has 
gone,  the  effect  of  all  the  suggested  plans  where  they  have  been 
placed  in  operation  has  been  to  weaken  the  efforts  of  trade  union- 
ism. In  fact,  the  majority  of  the  suggested  plans  have  received  the 
approval  of  management  because  of  its  opinion  that  these  plans 
would  weaken  or  destroy  the  trade  union  movement." 

The  natural  consequence  of  the  local  joint  council  type  of  col- 
lective bargaining,  if  successful,  will  be  to  undermine  the  union. 
Where  the  right  of  collective  bargaining  is  accorded  and  satisfac- 
tory adjustments  obtained,  without  the  expense  of  paying  union 
dues,  membership  in  unions  will  inevitably  dwindle  away.  It  is  not 
difficult  for  the  trade  union  to  hold  its  members,  when  no  other 
form  of  collective  bargaining  exists  and  when  dissatisfaction  over 
autocratic  control,  hours,  wages,  and  similar  matters  is  so  great 
that  the  worker  can  see  immediate  benefits  to  be  obtained  through 
union  activity.  Where  these  matters  are  satisfactorily  settled 
through  local  non-union  councils  it  is  extremely  improbable  that 
the  average  worker  will  be  amenable  to  the  arguments  of  the 
union  organizer. 

There  is  reason  to  believe,  therefore,  that  the  non-union  coun- 
cil and  the  unions  represent  antagonistic  and  competing  move- 
ments, and  that  many  workers  and  employers  are  making,  or  will 
make,  a  choice  between  these  two  types  of  collective  bargaining. 
Under  these  conditions,  it  is  important  to  inquire  into  the  relative 
merits  of  the  two  forms  of  organization. 

One  of  the  crying  evils  of  the  modern  industrial  system  is  the 
ever  increasing  subdivision  of  labor,  which  results  in  monotonous 
and  uninteresting  tasks.  The  worker  tends  more  and  more  to 
become  a  mere  cog  in  an  industrial  machine,  without  opportunity 


569]  TRADE   UNIONS  VERSUS  THE   NON-UNION  COUNCILS  165 

to  exercise  initiative,  to  think  and  plan,  and  to  see  his  own 
thoughts  and  will  expressed  in  his  work.  This  results  in  dwarfing 
the  worker's  intellect  because  his  unused  powers  atrophy 'and  he 
tends  to  lose  the  capacity  to  think,  plan,  and  create.  The  worker, 
whose  sole  activity  during  the  greater  share  of  his  waking  hours 
is  confined  to  some  simple  repetitious  task,  cannot  escape  the 
penalty  of  a  dwarfed  personality  and  a  stunted  intellect. 

The  hands  of  the  clock  cannot  be  turned  back.  A  return  to  the 
earlier  stage  of  craftmanship,  when  the  skilled  artisan's  activities 
were  sufficiently  broad  and  difficult  to  afford  exercise  for  his 
diverse  faculties,  is  both  impossible  and  undesirable.  However, 
something  must  be  done  to  counteract  the  deadening  and  dwarf- 
ing effect  of  minute  subdivision  of  labor.  It  is  a  problem  which 
must  be  approached  from  many  angles,  and  one  which  admits  of 
no  simple  solution.  One  argument  advanced  in  favor  of  the  local 
non-union  councils  is  that  they  make  a  contribution  to  the  solution 
of  this  problem. 

Scientific  management,  with  paternalistic  control,  intensifies  this 
problem,  by  imposing  upon  the  worker  such  minute  tasks  and 
such  minute  directions  that  he  is  relieved  of  the  last  vestige  of 
responsibility  and  opportunity  to  exercise  intellectual  faculties. 
On  the  other  hand,  democratic  industrial  management,  through 
shop  committees,  department  committees,  special  committees,  and 
works  councils  on  which  membership  is  rotated,  results  in  extend- 
ing to  the  worker  a  new  opportunity  to  shoulder  responsibility 
and  to  think  and  plan.  Where  such  committees  and  councils  study 
and  regulate  the  many  and  difficult  problems  of  industrial  rela- 
tions, and  also  undertake  constructive  problems  of  scientific  man- 
agement both  as  regards  productive  technique  and  distribution 
of  product,  the  problem  of  the  dwarfing  effect  of  simple  repetitious 
tasks  will  be  correspondingly  diminished. 

The  issue  at  this  point  is  whether  or  not  the  trade  union  type 
of  joint  industrial  management  can  accomplish  as  much  in  the 
solution  of  this  problem  as  can  the  local  non-union  council  plan. 
There  is  obviously  a  loss  of  local  shop  autonomy  under  trade 
unionism.  It  is  the  defense  of  the  union  business  agent  and  the 
union  trade  agreement,  that  they  relieve  the  members  of  the  shop 
or  works  of  the  task  of  defending  their  own  interests  with  result- 
ing possibilities  of  discrimination  on  the  part  of  employers. 


1 66    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [570 

The  few  hired  officials  of  the  union  devote  their  entire  time  to 
the  solution  of  the  problems  that  under  the  non-union  council 
plan  are  performed  by  the  local  shop  committee  or  shop  represent- 
atives on  the  works  council,  which  positions  can  be  and  are  held 
in  the  course  of  time  by  many  members  of  the  working  force. 

Nevertheless,  there  is  reason  to  believe  that  this  gain  in  the 
direction  of  local  autonomy  must  be  purchased  at  the  expense  of 
.retrogression  in  methods  of  collective  bargaining.  The  present 
integrated  union  movement,  which  has  placed  the  making  of  col- 
lective agreements  in  the  hands  of  central  authorities  and  the  en- 
forcement of  such  agreements  largely  in  the  hands  of  the  union 
officials,  has  evolved  in  response  to  definite  needs.  The  immediate 
members  of  any  working  force,  by  agitation  for  improved  condi- 
tions or  by  over-enthusiastic  and  efficient  defense  of  their  own  and 
their  fellow  workers'  interests,  subject  themselves  to  the  dis- 
approval of  their  foremen,  superintendents,  and  other  superior 
officers.  The  power  of  such  officials  over  the  worker,  both  as  re- 
gards security  of  tenure  and  advancement,  is  such  that  oftentimes 
it  precludes  the  possibility  of  effective  participation  in  collective 
bargaining  or  joint  industrial  management  by  the  local  workers. 
The  union  officials,  the  business  agent,  and  the  central  council  that 
meet  with  the  employers  to  draw  up  trade  agreements,  have  been 
evolved  in  order  to  remove  the  influence  of  local  exigencies  and 
deprive  the  employer  of  that  source  of  bargaining  power. 

By  pursuing  this  same  line  of  thought  a  step  further,  a  second 
significant  objection  to  the  local  non-union  council  is  revealed.  The 
integration  of  the  local  unions  into  trade  and  industrial  unions 
came  in  response  to  the  need  for  an  organization  sufficiently 
broad  in  scope  to  attack  industry-wide  problems.  For  example, 
where  competition  is  strong  within  an  industry,  no  local  union  can 
hope  to  obtain  substantial  improvements  in  the  economic  status 
of  its  members  so  long  as  low  wages,  long  hours,  and  adverse 
working  conditions  prevail  in  any  substantial  portion  of  the  in- 
dustry. This  constitutes  an  industry-wide  problem  that  can  be 
adequately  attacked  only  by  an  industry-wide  organization,  such 
as  the  trade  union  affords. 

The  significance  of  this  weakness,  en  the  part  of  the  local  non- 
union works  council,  has  been  deeply  impressed  upon  the  writer 
in  the  course  of  this  investigation,  by  reason  of  the  fact  that  a 


571  ]  TRADE   UNIONS  VERSUS  THE   NON-UNION   COUNCILS  167 

study  of  the  proceedings  of  works  councils  has  revealed  a  prev- 
alent use  of  the  exigencies  of  competition  as  an  argument  for  re- 
duction of  wages,  longer  hours,  or  many  similar  demands  of  the 
employers.  Facts  and  figures  carefully  organized  and  forcefully 
presented  which  show  that  an  increase  of  wages  is  impossible  and 
a  decrease  is  necessary  in  order  to  meet  competitors'  prices  and 
to  continue  to  gain  a  share  of  the  business,  become  the  employer's 
chief  ally  in  collective  bargaining  on  a  local  non-union  scale.  Few 
employees  comprehend  the  fact  that  once  this  force  of  competition 
is  given  a  free  rein  in  an  industry,  it  may  travel  a  course  that 
holds  wages,  hours,  and  working  conditions  down  to  anti-social 
levels. 

A  third  weakness  in  the  non-union  works  council  type  of  col- 
lective bargaining  is  found  in  the  lack  of  adequate  knowledge 
among  the  rank  and  file  of  the  workers.  The  following  extract 
from  a  letter  received  from  a  prominent  trade  unionist  deals  with 
this  point: 

"The  reason  why  we  oppose  all  of  these  plans  is  that  the  work- 
ers in  the  plant  cannot  secure  the  knowledge  necessary  to  enable 
them  to  hold  their  own  successfully  in  discussing  their  claims  with 
the  management. 

"The  workmen  in  a  plant  are  not  familiar  with  trade  reports, 
with  Dunns,  with  Bradstreets,  with  counsellor  reports,  with  the 
tendency  of  the  money  market,  with  internal  and  external  com- 
petition, with  conditions  obtaining  within  the  same  industry  in 
other  cities  and  states.  Without  such  knowledge,  they  are  not 
possessed  of  the  information  necessary  to  discuss  successfully 
wages,  etc.  with  their  employers.  It  is  only  a  trade  union  move- 
ment which  elects  men  to  devote  their  entire  time  to  studying 
these  questions,  which  is  able  to  supply  the  workers  with  the  in- 
formation they  require." 

Employers  themselves  have  often  testified  regarding  the  igno- 
rance of  the  average  worker  in  matters  of  business  finance.  Sur- 
plus and  depreciation  funds,  problems  of  attracting  adequate  cap- 
ital, the  meaning  and  significance  of  stock  dividends,  and  numer- 
ous similar  matters  are  so  misunderstood  by  the  workers  that 
their  concept  of  industrial  justice  is  thereby  sadly  warped.  This 
same  ignorance  gives  the  employer  the  upper  hand  in  bargaining 
with  the  local  non-union  shop  committee  or  works  council. 


i68    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [572 

The  most  popular  argument  against  the  non-union,  intra-plant 
type  of  collective  bargaining  remains  to  be  stated.  Many  council 
plans  provide  that  decisions  must  be  reached  by  agreement,  a 
unanimous  vote,  or  at  least  by  a  majority  vote  of  the  represent- 
ative body.  This  necessitates  the  approval  of  all  or  some  of  the 
employer's  representatives  before  any  measure  can  be  passed.  If 
the  company's  representatives  vote  "no"  to  labor's  proposals, 
what  alternative  is  left?  There  remains  only  the  resort  to  direct 
action  by  striking,  boycotting,  or  similar  tactics.  But  if  the  work- 
ers of  the  firm  have  forsaken  the  union  and  given  allegiance  to  the 
local  council  plan,  they  cannot  hope  to  use  direct  action  effective- 
ly. They  face  an  employer  backed  by  a  well  organized  employers' 
association,  pledged  to  help  him  win. 

According  to  a  recent  estimate  published  by  the  National  Indus- 
trial Conference  Board,  there  are  now  more  than  3,000  employers' 
associations  in  the  United  States  with  a  total  membership  of  over 
4,ooo,ooo.9  The  typical  employers'  association  is  so  organized 
and  managed  that  it  can  materially  increase  the  bargaining  power 
of  its  constituents.  Special  defense  funds,  devoted  to  the  assist- 
ance of  members  involved  in  industrial  emergencies,  and  salaried 
commissioners  or  executive  secretaries,  whose  duties  are  analagous 
to  those  of  the  business  agent  of  the  union,  are  maintained  by 
those  associations.  Provisions  are  made  whereby  in  time  of  emer- 
gency, such  as  the  strike,  a  member  may  draw  heavily  upon  the 
defense  fund,  may  receive  the  assistance  of  other  members  in 
filling  orders,  and  may  obtain  a  large  supply  of  all  necessary  types 
of  labor  through  the  central  association  and  its  members.  The 
association  will  also  exert  its  powerful  influences  in  every  way 
possible  to  obtain  for  the  member  who  is  in  trouble  concessions 
from  customers,  bankers,  and  those  furnishing  raw  materials. 
Against  this  array  of  power  the  workers  have  to  place  their  puny 
intra-plant  organization. 

Negotiations  through  this  intra-plant  organization  are  hardly 
entitled  to  the  name,  "collective  bargaining,"  for  the  most  essential 
attributes  of  individual  bargaining  are  present.  The  individual 
worker  bargaining  with  the  employer  has  always  suffered  from 
insufficient  waiting  power,  due  to  lack  of  funds;  from  immobility, 
due  to  lack  of  funds  and  lack  of  knowledge  of  the  labor  market; 

"Watkins,  Gordon  S.,  Introduction  to  the  Study  of  Labor  Problems,  p.  393. 


573]  TRADE   UNIONS  VERSUS  THE   NON-UNION   COUNCILS  169 

and  from  inadequate  leadership.  The  unions  have  been  evolved 
to  remedy  these  weaknesses.  These  basic  causes  of  inequality  in 
bargaining  power  are  not  remedied  by  the  local  non-union  type 
of  intra-plant  organization.  Direct  action  under  these  conditions 
would  be  ludicrous,  and  collective  bargaining  a  fiction.  True  col- 
lective bargaining  can  exist  only  where  there  is  approximate 
equality  of  bargaining  power  between  the  two  parties.  In  pro- 
portion as  this  equality,  the  essence  of  collective  bargaining,  is 
lost,  the  old  status  of  the  individual  bargain  prevails.  Such  would 
be  the  obvious  and  inevitable  effect  of  the  spread  of  the  local  non- 
union council  movement  in  so  far  as  it  replaces  or  forestalls  union- 
ism. 

While  admitting  the  force  of  the  foregoing  argument,  it  is 
necessary  to  call  attention  to  one  phase  of  the  question  which  such 
reasoning  ignores.  The  majority  of  the  local  council  plans  provide 
for  final  decisions  by  arbitration.  In  these  cases,  it  is  not  true 
that  the  company  officials  may  defeat  any  measure  by  voting 
"no";  that  they,  therefore,  hold  all  final  authority;  and  that  in 
case  they  oppose  a  measure,  the  only  recourse  of  the  workers 
is  to  direct  action  under  conditions  of  great  inequality  in  bargaining 
power.  In  the  minds  of  many  students,  final  arbitration  is  the 
fairest  solution  that  can  be  found  for  issues  upon  which  the  con- 
flicting parties  cannot  agree.  Indeed,  when  strong  unions  exist, 
the  result  of  collective  bargaining  is  frequently,  perhaps  generally, 
final  arbitration  or  a  compromise  similar  to  that  which  the  arbi- 
trator would  have  decreed. 

The  answer  most  frequently  offered  to  the  critics  of  the  non- 
union council  plans  is  that  the  non-union  councils  must  be  con- 
sidered a  success  and  more  advantageous  to  the  worker  than  the 
union,  because  wages,  hours,  and  general  conditions  have  been 
better  under  these  council  plans  than  in  plants  where  the  union 
prevails.  No  doubt  there  is  much  truth  in  this  assertion.  The 
evidence  collected  in  the  course  of  this  investigation  leaves  no 
doubt  in  the  writer's  mind  that  in  a  very  substantial  proportion 
of  the  plants  wherein  works  councils  or  shop  committee  systems 
have  been  introduced,  conditions,  hours,  and  wages  have  been  as 
good  as,  or  better  than,  unions  have  obtained  in  similar  plants 
elsewhere.  This  constitutes  one  of  the  most  promising  features  of 
the  works  council  movement,  and  explains,  in  part,  the  adverse 
effect  of  the  local  council  upon  the  union. 


170    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [574 

In  view  of  these  facts,  the  question  is  raised  as  to  the  validity 
or  significance  of  all  arguments  against  the  local  non-union  type 
of  collective  bargaining.  What  matters  it  that  they  have  no 
industry-wide  organization  to  meet  industry-wide  problems;  have 
less  bargaining  power  than  the  union;  and  cannot  avail  them- 
selves of  expert  knowledge  and  advice  as  can  the  union?  If  wages, 
hours,  and  conditions  are  as  good  as,  or  better  than,  in  union 
plants,  and  democratic  control  prevails  to  a  greater  degree,  what 
significance  have  such  supposed  weaknesses? 

This  proposition  is  open  to  attack  from  two  angles.  In  the  first 
place,  the  movement  is  yet  in  its  infancy.  The  majority  of  council 
plans  have  not  yet  celebrated  their  fourth  birthday.  The  move- 
ment is  largely  anti-union  and  if  it  is  to  accomplish  its  purpose 
of  destroying  existing  unions  and  checking  the  spread  of  unions, 
it  must  make  a  good  record  in  its  first  four  years.  The  employees 
may  have  no  real  authority,  but  the  management  may  have 
paternalistically  conceded  as  good,  or  better,  wages,  hours,  and 
conditions  as  the  unions  obtain  elsewhere  in  order  to  convince  the 
workers  that  local  collective  bargaining  is  as  effective  as  unionism. 
However,  gradually  as  the  existing  unions  are  weakened,  or  the 
danger  of  the  spread  of  unionism  within  the  industry  is  dimin- 
ished, the  autocratic  power  of  the  management  can  be  reasserted 
and  profits  increased  at  the  expense  of  wages.  In  short,  once  the 
local  non-union  council  type  of  collective  bargaining  is  firmly 
installed  in  an  industry,  the  employer  will  be  able  to  manipulate 
wages,  hours,  and  conditions,  so  as  to  forestall  the  growth  of 
unionism.  But  to  do  so  will  necessitate  placing  wages,  hours,  and 
conditions  on  a  par  with  those  obtained  by  the  unions  only  at 
times  when  unionism  threatens  to  regain  its  foothold.  At  other 
times,  perhaps  for  long  periods  after  unionism  within  the  industry 
is  thoroughly  broken,  the  terms  of  the  labor  contract  can  be 
made  favorable  to  the  employer.  Long  run  profits  under  such  a 
system  might  be  larger  and  long  run  wages  less  than  under  union 
conditions. 

The  proponents  of  unionism  also  urge  that  the  fact  that  wages, 
hours,  and  conditions  in  many  plants  having  non-union  council  or 
committee  plans  are  as  good  as,  or  better  than,  in  the  union 
plants,  instead  of  being  an  argument  for  such  plans,  is  in  reality 
another  tribute  to  the  trade  unions.  The  existence  of  the  unions 


575]  TRADE   UNIONS  VERSUS  THE   NON-UNION  COUNCILS  17 1 

and  favorable  terms  of  the  labor  contract  obtained  by  them,  has 
been  the  force  that  has  compelled  the  paternalistic  employer  to 
grant  equally  favorable  terms  to  his  employees  in  order  to  make 
his  non-union  council  plan  a  success.  The  accomplishments  of  the 
unions  have  redounded  to  the  benefit  of  the  workers  in  these  non- 
union plants  in  the  same  way  that  they  redound  to  the  benefit  of 
the  remnants  of  unorganized  workers  in  any  well  organized  trade. 

Finally,  in  this  connection,  it  should  be  emphasized  that  the 
existence  of  favorable  terms  in  the  labor  contracts  obtained  under 
non-union  intra-plant  bargaining  does  not  remove  the  objection 
that  the  broader  functions  of  the  trade  unions,  as  embodied  in 
their  political  activities  in  behalf  of  labor,  cannot  be  performed 
by  the  local  intra-plant  organization. 

Another  defense  of  the  non-union  works  council  is  based  upon 
the  proposition  that  the  works  council  brings  increased  cooperation 
and  good  will,  with  a  resulting  increase  in  productivity,  which  re- 
dounds to  the  benefit  of  worker,  employer,  and  consumer,  while 
the  union  causes  and  encourages  class  struggle.  Under  the  latter 
condition,  bitterness,  restriction  of  output,  striking  on  the  job,  and 
general  inefficiency  are  the  result.  The  product  to  be  distributed 
grows  less  per  man,  and  the  struggle  of  each  factor  for  a  larger 
share  is  thereby  intensified. 

There  is  truth  in  this  oftentimes  exaggerated  contrast  of  the  two 
movements.  The  rapid  growth  of  organization  among  the  workers 
has  been  paralleled  by  a  similar  rapid  growth  of  organization 
among  the  employers.  The  ill  will  and  intolerance  in  each  of  these 
opposing  camps  have  apparently  steadily  increased,  and  the  in- 
creasing scope  and  intensity  of  the  struggle  that  has  ensued  have 
afforded  a  wealth  of  support  for  the  proponents  of  the  Marxian 
doctrine  of  class  struggle. 

On  the  other  hand,  the  vast  majority  of  the  local  non-union 
works  councils  have  apparently  operated  in  an  atmosphere  of 
good  will  and  have  gained  much  constructive  cooperation.  In- 
creased production  and  a  decrease  of  strikes  and  other  more  subtle 
types  of  industrial  warfare  have  been  the  general  result. 

However,  in  an  impartial  discussion  of  the  relative  merits  of 
these  two  types  of  collective  bargaining,  cognizance  must  be  taken 
of  the  truth  in  the  union's  contention  that  the  cause  of  the  class 
conflict  that  results  from  unionism  is  to  be  found  in  the  antago- 


172    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [576 

nism  of  the  employing  class.  The  general  situation  has  been 
characterized  by  the  refusal  of  the  employers  to  deal  with  the 
unions.  They  have  declared  war  upon  unions  and  have  dealt  with 
their  representatives  only  when  forced  to  do  so.  They  have  as- 
sumed the  right  of  organization  among  themselves,  but  have  tried 
to  deny  that  right  to  the  workers.  The  only  possible  outcome  has 
been  class  struggle,  warfare,  ill  will,  and  inefficiency. 

Nevertheless,  it  is  urged,  there  are  exceptions  that  show  that 
such  evils  are  not  a  necessary  corollary  of  collective  bargaining 
through  unions.  The  successful  council  movement  in  England  has 
been  based  upon  unionism.  The  works  committees,  district  and 
national  councils,  are  composed  of  union  and  management  repre- 
sentatives. The  accomplishments  of  these  councils  have  been  such 
as  to  demonstrate  the  possibilities  of  constructive  cooperation  be- 
tween men  and  management,  when  management  gives  such  co- 
operation a  frank  and  fair  trial.  Similar  results  are  claimed  for 
the  industrial  councils  found  in  the  printing  and  electric  industries 
in  the  United  States.  The  success  of  the  Hart,  Schaffner  and 
Marx  plan  of  industrial  relations  is  also  cited  in  this  connection 
as  an  example  of  constructive  cooperation  of  management  and 
union  men,  with  resulting  good  will  and  efficiency. 

There  is,  in  fact,  something  intangible  about  the  contention  that 
the  trade  unions  necessarily  bring  class  conflict,  ill  will,  and  in- 
efficiency, while  the  local  company  unions  bring  good  will,  co- 
operation, and  efficiency.  It  is  the  almost  universal  testimony  of 
employers  who  have  tried  non-union  works  council  plans,  that 
they  have  found  their  men  intelligent  and  reasonable,  and  co- 
operation with  them  an  easy  matter.  Is  it  impossible  for  the  em- 
ployers to  cooperate  with  these  men  when  they  are  organized  into 
unions?  Or  has  the  employer's  bitter  warfare  against  the  union 
brought  a  logical  reaction  of  bitterness  and  warfare  from  its  mem- 
bers, and  forced  it  to  develop  a  radical,  militant,  type  of  leaders 
in  place  of  a  more  constructive  type?  Here  again  we  must  freely 
acknowledge  a  modicum  of  truth  in  the  arguments  of  both  sides. 

The  size  and  scope  of  trade  or  industrial  unions  increase  their 
problem  of  maintaining  membership,  interest,  and  efficient  leaders. 
The  agitator's  services  are  needed.  He  gains  control,  and  as  a 
result  the  employer  is  antagonized;  unreasonable  demands  by  the 
unions  increase;  and  industrial  warfare  is  intensified.  But  it  is 
also  true  that  trade  unions  have  been  forced  to  fight  a  long  battle 


57?]  TRADE   UNIONS  VERSUS  THE   NON-UNION  COUNCILS  173 

merely  to  establish  their  right  to  collective  bargaining,  and  that 
the  effect  of  this  general  opposition  by  employers  has  necessitated 
the  very  fighting,  agitating,  fire-eating,  type  of  union  leaders  of 
which  they  now  complain. 

In  one  respect  it  is  obvious  that  the  local  works  council  fails 
entirely  to  offer  a  satisfactory  substitute  for  the  trade  unions.  The 
tendency  is  always  to  conceive  of  the  functions  of  the  trade  unions 
in  terms  of  bargaining  for  wages,  hours,  and  working  conditions, 
and  to  overlook  their  extensive  accomplishments  of  obtaining 
labor  legislation,  the  proper  enforcement  of  labor  laws,  and  the 
defeat  of  proposed  legislative  measures  opposed  to  the  interests 
of  the  workers.  Minimum  wages,  regulation  of  hours  and  condi- 
tions of  work,  workmen's  compensation,  child  labor,  immigration, 
tariffs,  regulation  of  employment  bureaus,  are  but  a  few  examples 
of  the  many  subjects  upon  which  organized  labor  has  helped  to 
obtain  legislation  favorable  to  the  worker.  Many  trade  agree- 
ments, notably  in  the  mining  and  railroad  industries,  call  for  the 
enforcement  of  all  labor  laws.  The  American  Federation  of  Labor 
has  its  state  and  national  legislative  committees,  and  through  its 
organized  lobbying  system  focuses  the  political  power  of  labor 
upon  desirable  or  undesirable  legislation.  This  function  of  the 
American  trade  union  is  made  doubly  significant  and  essential  by 
the  absence  of  a  labor  party.  Without  the  unions,  labor's  political 
power  in  the  United  States  would  be  almost  nil.  These  broader 
functions  performed  in  the  interests  of  labor  by  the  unions  could 
never  be  performed  by  the  local  non-union  councils.  Coordinated 
activity  would  be  impossible.  The  most  desirable  course,  accord- 
ing to  many  unionists,  would  be  to  have  both  the  union  and  the 
local  shop  committees  and  councils,  and  to  obtain  the  benefits  of 
both  forms  of  organization. 

In  the  1919  convention  of  the  American  Federation  of  Labor  the 
following  resolution  was  passed: 

"The  Executive  Council  believes  that,  in  all  large  permanent 
shops  a  regular  arrangement  should  be  provided  whereby — 

"First; — A  committee  of  the  workers  would  regularly  meet  with 
the  shop  management  to  confer  over  matters  of  production;  and 
whereby — 


1/4    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [578 

"Second — Such  committees  could  carry  beyond  the  foreman  and 
superintendent  to  the  general  manager  or  to  the  president,  any 
important  grievance  which  the  workers  may  have  with  reference 
to  wages,  hours,  and  conditions." 

Matthew  Woll,  vice-president  of  the  American  Federation  of 
Labor,  writes  this: 

"It  is  not  urged  that  the  'Shop  Committee'  plan  as  a  supple- 
mental branch  to  the  trade  unions  cannot  be  made  to  serve  a  most 
helpful  purpose  in  industry.  To  the  contrary,  the  necessity  of 
team  work  between  all  workers  in  a  plant  or  shop  is  fully  and 
freely  conceded.  Indeed,  the  formation  of  shop  committees  is  re- 
quired by  many  trade  unions  as  a  method  of  considering  problems 
of  production  with  the  shop  management,  to  secure  team  work,  to 
adjust  conflicts,  and  if  need  be,  to  take  up  all  shop  questions  with 
the  highest  officials  of  the  plant. 

"The  trade  unions  fully  recognize  that  there  are  many  questions 
closely  affecting  daily  life  and  comfort  in  the  success  of  business, 
and  in  no  small  degree,  efficiency  in  production,  which  are  peculiar 
to  -the  individual  workshop  and  factory.  Confined  to  these  pur- 
poses .  .  .  .  ,  shop  committees,  as  supplemental  branches  of  the 
trade  union  movement,  are  not  alone  favored  but  recom- 
mended."10 

In  Chapter  V  of  this  study,  a  description  of  the  type  and  func- 
tions of  shop  committees  which  exist  in  many  union  plants  was 
given.  These  committees  are  composed  of  representatives  elected 
by  all  the  men  in  the  shop,  or  of  a  single  shop  steward  who  is 
elected  by  the  men  or  appointed  by  the  union.  The  function  of 
these  local  union  shop  committees  or  shop  stewards  is  primarily 
to  interpret  and  enforce  the  terms  of  the  trade  agreement,  and  to 
adjust  any  grievances  or  conflicts  that  arise.  Such  committees 
meet  with  representatives  of  the  management,  thus  forming  joint 
committees.  It  is  this  type  of  shop  committees  that  the  trade 
union  leaders  have  in  mind  when  they  express  their  approval  of 
local  shop  organization.  Stated  concisely,  their  position  is  this: 

The  satisfactory  solution  of  some  problems,  such  as  hours, 
wages,  and  working  conditions,  necessitates  uniformity  and  stand- 
ardization throughout  a  competitive  industry.  Such  uniformity 

™4nnals  of  the  American  Academy  of  Political  and  Social  Science,  Vol.  XCI, 
September,  1920,  p.  14. 


5791  TRADE   UNIONS  VERSUS  THE   NON-UNION  COUNCILS  1/5 

and  standardization  can  be  obtained  only  through  trade  unions 
negotiating  district  or  national  trade  agreements.  Local  shop  com- 
mittees and  works  councils  cannot  be  permitted  to  tamper  with 
such  issues.  But  in  the  local  interpretation  and  application  of 
the  necessarily  broad  and  general  provisions  of  the  trade  agree- 
ment, as  well  as  in  the  adjustment  of  all  minor  grievances  and 
conflicts  that  arise  between  employer  and  men,  there  is  room  for 
much  constructive  work  by  a  local  shop  committee  or  works  coun- 
cil. Moreover,  there  are  unlimited  possibilities  of  constructive  co- 
operation between  such  local  committees  of  the  men  and  manage- 
ment in  developing  improved  methods  of  production.  Finally, 
there  is  no  objection  to  such  local  committees  cooperating  with  the 
management  in  fixing  shop  rules  and  regulations,  in  so  far  as  this 
involves  no  interference  with  the  terms  of  the  trade  agreements. 

Under  such  an  arrangement,  the  work  of  the  shop  committees 
and  works  councils  would  be  coordinated  with,  and  supplemental 
to,  the  larger  union  organization.  They  might  be  an  integral  part 
of  the  union,  as  in  the  case  of  many  of  the  works  councils  in  Eng- 
land; or,  like  the  German  works  council,  they  might  be  a  distinct 
organization,  elected  by  all  union  and  non-union  workers  in  the 
shop  or  plant,  but  operating  in  strict  harmony  and  cooperation 
with  the  union. 

However,  it  cannot  be  conceded  that  such  an  arrangement 
would  gain  the  benefits  of  both  central  and  local  organizations.  In 
the  first  place,  it  is  obvious  that  any  attempt  to  subordinate  the 
local  works  council  to  the  union,  could  succeed  only  by  the  sacri- 
fice of  local  shop  autonomy  in  the  crucial  matters  of  wages,  hours, 
conditions  of  work,  and  closely  related  problems.  This  would  re- 
sult in  a  proportionate  loss  in  interest  on  the  part  of  the  working 
force,  and  a  proportionate  loss  of  efficiency.  The  power  of  the 
local  committee  or  council  to  conteract  the  narrowing  influence  of 
subdivision  of  labor  and  machine  production  by  extending  to  the 
worker  an  opportunity  for  activity  on  committees  handling  these 
important  problems  would  be  correspondingly  diminished. 

In  the  second  place,  the  expected  benefit  under  the  local  type  of 
organization  of  avoiding  an  undesirable  class  of  leaders  would  be 
lost  by  combining  the  unions  and  the  local  councils.  The  union 
demands,  and  encourage  industrial  warfare,  might  still  hold  sway, 
agitator  who  would  antagonize  employers,  make  unreasonable 
demands,  and  encourage  industrial  warfare,  might  still  hold  sway. 


176    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [580 

The  foregoing  discussion  does  not  form  an  adequate  basis  for 
any  unqualified  conclusions  respecting  the  merits  of  the  union  and 
the  non-union  council.  It  has  been  made  apparent  that  such  gains 
as  the  worker  can  hope  to  attain  through  the  choice  of  localized 
collective  bargaining  under  a  non-union  council  plan  must  be  pur- 
chased at  a  tremendous  expense  and  with  great  risk.  Such  a 
choice  would  be  accompanied  by  great  possibilities  of  future  harm 
to  the  working  class. 

For  most  employers,  the  local  non-union  council  type  of  bar- 
gaining is  possibly  the  most  desirable.  In  these  days  of  monopoly, 
combination,  open  price  associations,  and  gentlemen's  agree- 
ments, the  intensity  of  competition  has  been  greatly  diminished. 
Nevertheless,  there  may  be  employers  who  desire  to  improve 
the  standard  of  living  of  their  workers,  but  who  are  really  unable 
to  do  so  because  of  competition.  To  such  employers,  the  union's 
help  in  standardizing  conditions  would  be  welcome,  and  if  higher 
standards  for  the  worker  but  increased  efficiency,  the  result  would 
be  beneficial  to  all  concerned.  There  may  also  be  employers  who, 
under  localized  non-union  collective  bargaining,  would  lower 
wages  and  lengthen  hours  until  the  resulting  inefficiency  would 
defeat  their  own  end  of  increasing  profits.  To  them,  the  power  of 
a  strong  union  to  hold  up  higher  standards  would  be  beneficial. 
But  to  the  employers  who  recognize  the  possibilities  of  more 
democratic  industrial  management;  who  install  a  genuine  em- 
ployee representation  plan;  who  thereby  avoid  industrial  warfare 
with  unions;  and  gain  the  good  will  and  cooperation  of  their  work- 
ing force,  to  such  employers  the  non-union  councils  are  most  de- 
sirable. The  majority  of  employers  now  having  non-union  coun- 
cil plans  belong  to  the  latter  group.  They  have  found  their  council 
plans  a  decided  success. 

The  defense  of  the  non-union  council  plans  is  often  stated  in 
terms  of  the  benefits  accruing  to  the  general  public  or  the  con- 
sumers. Less  industrial  warfare  and  increased  production  result- 
ing from  works  council  plans  might  result  in  lower  prices.  On  the 
other  hand,  if  the  increased  productivity  resulted  in  larger  profits, 
rather  than  lowered  prices,  the  benefit  to  consumers  would  be 
lost.  Finally,  if  the  bargaining  power  of  the  workers  should  be 
lessened,  in  the  long  run,  by  virtue  of  their  choice  of  the  local 
council  in  preference  to  the  union,  any  benefit  to  them  from  lower 
prices  might  be  more  than  overbalanced  by  their  loss  in  wages. 


581]  TRADE   UNIONS  VERSUS  THE   NON-UNION   COUNCILS  177 

One  effect  of  the  works  council  movement  appears  certain.  It 
has  already  gained  sufficient  momentum  and  sufficient  scope  to 
arouse  in  the  leaders  of  organized  labor  bitter  antagonism.  It  has 
already  spread  to  over  seven  hundred  American  plants,  and  its 
progress  in  the  last  two  years  has  been  greater  than  in  the  preced- 
ing two  years.  The  immediate  effect  of  this  has  been,  and  will  be, 
to  incite  the  unions  to  greater  efforts  and  to  make  the  industrial 
conflict  at  many  points  more  bitter  than  before.  "Company 
unions"  have  already  been  classified  with  "scabs,"  and  have  be- 
come a  new  object  for  hatred  and  abuse.  To  one  who  follows  the 
labor  press  it  appears  that  they  bid  fair  to  become  not  a  harbinger 
of  peace  and  good  will,  but  a  new  bone  of  contention  and  a  new 
cause  of  industrial  conflict. 

There  seems  to  be  little  probability  that  the  non-union  council 
movement  will  destroy  many  existing  unions  in  the  near  future. 
Nevertheless,  the  experience  in  the  packing  industry  has  shown 
that  union  leaders  have  a  new  and  serious  factor  with  which  to 
contend.  The  council  plan  of  the  Pennsylvania  Railroad  is  well 
established,  and  if  similar  plans  are  adopted  in  any  substantial 
proportion  of  the  railroad  industry,  the  outcome  of  another  great 
railroad  strike  might  be  such  as  to  break  the  strength  of  even  the 
strong  railroad  brotherhoods.  In  any  event,  their  power  would  be 
seriously  lessened.  However,  the  non-union  council  movement,  if 
the  present  rapid  rate  of  increase  continues  long,  cannot  fail  to 
check  materially  the  growth  of  unions.  It  is  in  this  direction, 
rather  than  in  destroying  existing  unions,  that  its  effects  will  be 
most  harmful  to  the  plans  of  organized  labor. 


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INDEX 


Ability  of  workers  to  share  in  control, 

I3I-I34 

American  Multigraph  Co.,  83,  107,  117, 

136 
Arbitration    provisions    in    non-union 

plans,  60-63,  83 
Austrian  works  council  law,  33-34 

Bethlehem  Steel  Co.,  56,  62,  108 
Birmingham  Alliances,  12 
Bowser,  S.  F.  &  Co.,  55,  65 
Bridgeport  Brass  Co.,  57,  65,  66,  108 
Browning  Co.  of  Cleveland,  94,  102 
Building  industry,  industrial  council  in, 
12 

Cabinet,  in  Leitch  plan,  42,  59 

Chamber  of  Commerce  of  Cleveland, 
report  of,  86 

Collective  bargaining,  71,  164 

Colorado  Fuel  and  Iron  Co.,  42,  61, 
100,  107,  130,  131 

Constructive  National  Joint  Councils, 
149-157;  first  example:  international 
joint  industrial  council  of  Interna- 
tional Photo-Engravers'  Union  and 
American  Photo-Engravers'  Associa- 
tion, 149-152;  second  example:  in- 
ternational joint  conference  council  of 
Commercial  and  Periodical  Branches 
of  the  Printing  Industry,  152-153; 
third  example:  Electrical  Construc- 
tion Industry,  153-156 

Council  movement,  theory  of,  68-97; 
larger  aspects  of,  68-70;  as  a  means 
to  check  the  growth  of  unions,  71 

Council  movement  in  England,  prior 
to  Whitley  Councils,  10-16 

Czecho-Slovakian  works  council  law,  35 

Davis  Coal  &  Coke  Co.,  43 

Democratic  industrial  management,  69- 
70,  78-80,  82-84;  as  a  means  to  in- 
dustrial efficiency,  72-96;  as  a  remedy 
for  evils,  75 

Demuth,  Wm.  &  Co.,  43,  100 

Dennison  Manufacturing  Co.,  62 

Discharge,  90 

Discipline,  128 

Discrimination,  104-106 

Dutchess  Bleachery,  Inc.,  62,  102,  107 

Educational   value   of  works  councils, 


Efficiency,  works  councils  as  a  means 
to,  72 

Electrical  Constructive  Industry,  joint 
councils  between  unions  and  em- 
ployees, 153 

Elgin  Watch  Co.,  58 

Employers'  attitude  toward  works 
councils,  161 

Examples  of  increased  efficiency  brought 
about  in  concerns  having  council 
plans,  115-119 

Filene  &  Co.,  38,  102 
Filene  Cooperative  Association,  38-40 
Financial  incentive  plans,  86 
Forms  of  non-union  councils,  52 

Garton  Foundation,  report  of,  80 
General  Electric  Co.,  45-59,  64-65 
General  joint  council,  52-54,  57 
Geometric  Tool  Co.,  42 
German    constitutional    provision    for 

works  councils,  26 
German  works  council  law,  27-29 
German  works  councils,  24;  results  of, 

30-31;  relations  to  trade  unions,  32-33 
Glass     Blowers'     Association     of    the 

United  States  and  Canada,  142 
Goodyear  Tire  and  Rubber  Co.,  100, 

129 
Governmental  plan,  42 

Hardwick  and  Magee  Co.,  64 
Harris  Engineering  Co.,  43 
Health  of  workers,  87 
House   of  Representatives,    in   Leitch 
plan,  42,  59 

Industrial  democracy,  the  movement 
towards,  68 

Industrial  Council  of  Building  Industry, 
12-14 

International  Harvester  Co.,  53,  60, 
100,  132,  136 

International  Molders'  Union  of  North 
America,  141 

International  Union  of  United  Brewery, 
Flour,  Cereal,  and  Soft  Drink  Work- 
ers of  America,  142 

International  Typographical  Union,  142 

Intertype  Corporation,  56,  64 

Joint  councils,  to  form  trade  agree- 
ments, 141 


181 


182    WORKMEN'S  REPRESENTATION  IN  INDUSTRIAL  GOVERNMENT  [588 


Joint  shop  committees,  53,  56-59,  65 
Joint  special  committees,  53-57,  59 
Joint  works  councils,  53-58,  65 
Joseph  Feiss  Co.,  43 

Labor  turnover,  88-89,  126 

Leitch,  John,  41-42,  100 

Local  union  joint  councils,  144-149 

Manufacturers'  Association  of  Bridge- 
port, Conn.,  report  on  success  of 
works  councils,  136 

Midvale  Steel  and  Ordnance  Co.,  54,  61 
Milwaukee  Electric  Railway,  41 

National    Brotherhood    of    Operative 

Potters,  141 
National  joint  councils  of  unions  and 

employers'  associations,  149 
National  War  Labor  Board,  its  work, 

43-45, 72 

Nelson  Valve  Co.,  Philadelphia,  40 
Nernst  Lamp  Co.,  of  Pittsburg,  40 
Non-union   council   movement   in    the 
United  States,  37-67;  early  history 
of,  38-43;  period  of  expansion,  43; 
continued  growth  of,  47-49;  Causes  of 
rapid    growth,    50;    Description    of: 
according    to    form,    52-53,    typical 
plans,   53,   procedure,  function,  and 
authority,  60 

Norwegian  works  council  law,  34-35 
Nunn,  Bush,  and  Weldon  Shoe  Co.,  43, 
62,  100 

Object  of  this  study,  primary,  9 
Objections  to  non-union  councils,  165- 
168 

Packard  Piano  Co.,  41-42,  115 

Philadelphia  Rapid  Transit  Co.,  41,  63, 
107 

Piece  rates,  84 

Pilgrim  Laundry  Co.,  42 

Plimpton  Press,  43 

Printing  industry,  joint  councils  in,  152 

Proctor  Gamble  Co.,  55,  64 

Profits,  dividends,  and  financial  meth- 
ods, 81-84 

Promotion,  95-96 

Questions,  dealt  with  in  works  councils, 
no-ill;  dealt  with  in  union  joint 
councils,  144 

Reliable  Stove  Co.,  64-65 

Remington  Arms  Union  Metallic  Cart- 
ridge Co.,  58,  64 

Report  of  Ministry  of  Labor,  on  works 
councils,  1 6 


Results  of  non-union  works  councils,  98, 
the  degree  of  true  democratic  man- 
agement, 98-112 

Scientific  management,  in  connection 
with  works  councils,  79,  115,  165 

Senate,  in  Leitch  plan,  42,  59 

Settlement  of  grievances,  by  arbitration, 
60-64;  by  manager  or  committee  of 
officials,  64-65;  by  joint  committee, 
65;  by  joint  works  council,  65 

Shipbuilding  Labor  Adjustment  Board, 
46-48 

Shop  committees,  54,  56,  58 

Shop  discipline,  92-93 

Shop  steward,  14 

Sidney  Blumenthal  &  Co.,  43 

Special  committees,  56 

Sprague  Electric  Works,  64 

Subjects,  dealt  with  in  trade  agree- 
ments, 143-144;  considered  and  hand- 
led in  part  by  workers'  committees 
106-112 

Swift  &  Co.,  ico,  108 

Testimony,  of  employers  regarding 
works  council  plans,  1 13;  of  effect  of 
non-union  councils  upon  unions,  162- 
164 

Trade  agreements  formed  by  joint 
councils,  141-144 

Trade  unions,  versus  the  non-union 
councils,  159-177;  relation  to  works 
councils,  71 

Union  shop  stewards,  different  terms 
used  in  designation  of,  14;  functions 
of,  14 

Union  joint  councils,  140-158;  three 
types  of,  140 

Union  Made  Manufacturers'  Associa- 
tion, 142 

United  Garment  Workers  of  America, 
142 

Utilizing  the  workers'  knowledge,  93 

Wages,  119-126 

Walworth  Manufacturing  Co.,  137 
War  Labor  Board,  43 
Westinghouse  Electric  and  Manufactur- 
ing Co.,  56 

White  Motor  Co.,  42,  116 
Whitley  Committee,  10;  report  of,  17 
Whitley  Councils,  16-19;  activities  of, 

20-22 

Woll,  Mathew,  testimony  regarding 
works  councils,  174 

Works  councils,  54-56,  58,  64;  opposi- 
tion to  unions,  71;  where  developed, 
9;  as  a  substitute  for  unions,  158,  166- 

J77 
Working  conditions,  87 


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